In 2024, Nigeria generated a staggering ₦597 billion from mobile data charges on its citizens
In a bid to boost VAT receipts, the federal government has announced plans to implement reforms, aiming to reach a target of ₦9.09 trillion ($6.05 billion) by 2027. This ambitious goal is part of a broader strategy to increase the tax-to-GDP ratio from under 10% to 18% by 2027.
The growth in the Information and Communication Technology (ICT) sector has been a significant factor in this upward trend. According to the World Bank, the sector's growth in 2023 was attributed to increased data usage. Since 2019, data has become the primary driver of telecoms service consumption.
This surge in data usage has been reflected in the sector's financial performance. In 2024, VAT from the information and communication sector, primarily dominated by telecoms, amounted to ₦597.65 billion ($398.04 million), a 122.31% rise from the ₦268.84 billion ($179.05 million) recorded in 2022.
Two of Nigeria's leading telecoms companies, MTN and Airtel, have reported impressive growth in their data revenues. MTN's data revenue increased by 108.46% to ₦1.59 trillion ($1.06 billion) in 2024 from ₦764.82 billion ($509.37 million) in 2022. Airtel's data revenues are up 50.35% since 2020, reaching $654 million as of its fiscal year ended March 2024.
The increased data usage can also be seen in the monthly data bill, which jumped by 307.74% to ₦721.18 billion ($480.31 million) in July 2025. This surge in data consumption has been a topic of discussion at recent tech conferences, with GSMA stating that every gigabyte Nigerians use is becoming just as valuable as crude oil was a decade ago.
Despite these impressive figures, six in ten Nigerians remain offline due to expensive smartphones. Efforts are being made to close this gap and increase VAT revenue. The government projects ₦6.95 trillion ($4.63 billion) in VAT collections for 2025, ₦8.04 trillion ($5.36 billion) in 2026, and ₦9.09 trillion ($6.05 billion) in 2027.
Operators remain optimistic about the future growth of the data sector in Nigeria. The next session of the Moonshot series, focusing on tech and blockchain discussions in Africa, will take place on October 15-16, 2025, at the Eko Convention Center in Lagos, Nigeria. This event, hosted by TechCabal, is expected to provide valuable insights into the future of the ICT sector in Nigeria.
However, the VAT rate remains at 7.5%, and a proposal to raise it to 10% has been halted by the Senate. Despite this, the government's reforms are expected to continue, aiming to capitalise on the growing data consumption trend in Nigeria and boost the country's VAT receipts.
In addition to the growth in voice revenues, which grew by 25.61% to ₦1.30 trillion ($865.80 million) during the same period, these developments highlight the significant role the ICT sector plays in Nigeria's economy. As data consumption continues to rise, VAT revenues from this sector are expected to continue increasing, providing a crucial source of revenue for the federal government.
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