World Bank Raises Concern Over Nigeria’s Soaring Cost of Revenue Collection

Story written by Okafor jOSEPH October 9,2025

The World Bank has expressed concern over the increasing cost of revenue collection in Nigeria, warning that the growing expenditure required to gather public funds is undermining government efficiency and fiscal stability.

In its latest Nigeria Development Update (NDU) report, the global lender noted that while revenue generation has improved slightly in recent years, the cost of collecting those revenues has risen disproportionately, reducing the net fiscal benefits.

According to the report, Nigeria’s tax and revenue agencies continue to spend significantly on administrative and operational expenses, including logistics, enforcement, and technology, which in many cases exceed global best practices.

The World Bank emphasized that such inefficiencies threaten the federal government’s fiscal reform goals, particularly efforts aimed at expanding the tax base, reducing leakages, and boosting non-oil revenues.

It urged Nigerian authorities to strengthen coordination among revenue-generating institutions, improve automation, and reduce manual processes that inflate costs and create opportunities for corruption.

Experts say the rising collection cost reflects systemic inefficiencies, duplication of roles among revenue agencies, and weak oversight mechanisms.

The report also advised the government to align its fiscal strategies with transparent accountability frameworks and adopt cost-effective models used by emerging economies with similar revenue structures.

The World Bank reiterated its support for Nigeria’s ongoing fiscal reforms but cautioned that without addressing the high cost of revenue collection, the government’s target of sustainable growth and debt reduction could remain elusive.