They Said Ogun Had the Industries... Makinde's Oyo Still Beat Them to Nigeria's No. 3 VAT Spot
From Akala to Makinde: How Oyo State Rose to Become Nigeria's Third-Largest VAT Contributor
The latest VAT contribution figures released by the Federation Account Allocation Committee (FAAC) and analysed by TheCable Index have once again placed Oyo State in the national spotlight. Between January and June 2026, Oyo generated an impressive ₦253.67 billion in Value Added Tax (VAT), ranking third nationwide, behind only Lagos and Rivers States. Remarkably, Oyo outperformed Ogun State, despite Ogun's larger concentration of manufacturing industries and its strategic proximity to Lagos, Nigeria's commercial capital.
For many observers, this achievement is more than just a statistical milestone—it reflects the steady transformation of Oyo State's economy over the years.
From the administration of the late Governor Adebayo Alao-Akala, successive governments laid foundations in different sectors of the state's economy. However, the pace of economic expansion has become increasingly evident under Governor Seyi Makinde, whose administration has focused on infrastructure renewal, road construction, agribusiness, security, investment promotion and improving the ease of doing business. These initiatives have helped stimulate commercial activities across Ibadan and other major towns in the state.
VAT is widely regarded as a strong indicator of economic activity because it is generated through the consumption of goods and services. A higher VAT contribution often reflects increased business transactions, stronger commercial activity and greater confidence within the local economy.
That Oyo now ranks third nationally is particularly noteworthy when compared with Ogun State. Ogun enjoys significant industrial advantages, including numerous manufacturing estates, several multinational companies and direct access to Lagos through major transport corridors. Despite these structural advantages, the latest FAAC figures show Oyo generating substantially more VAT during the first half of 2026.
Many analysts attribute this performance to the expansion of commerce within Oyo State, improved public infrastructure, increased government spending that circulates money within the local economy, growing real estate investments, expanding retail businesses and deliberate efforts to attract private-sector investment. The Makinde administration has consistently argued that sustained investments in infrastructure and economic development have broadened the state's tax base and encouraged business growth.
The significance of this achievement goes beyond rankings. It demonstrates that Oyo is steadily evolving from being primarily a civil service-driven economy into one increasingly powered by commerce, enterprise and private investment.
While every administration has contributed to the state's development journey in different ways, the latest VAT figures suggest that Oyo's economic trajectory has accelerated in recent years. The state's emergence as one of Nigeria's leading VAT-generating economies highlights the cumulative impact of years of investment and policy reforms.
As conversations continue about fiscal federalism and revenue generation in Nigeria, Oyo State's performance offers an important case study. It shows that with consistent investment in infrastructure, security and economic expansion, states can significantly improve their contribution to the national economy.
For Governor Seyi Makinde, Oyo's third-place ranking is likely to be viewed by supporters as further evidence that his administration's economic agenda is yielding measurable results. For the people of Oyo State, it is another indication that the state's economic profile is rising steadily on the national stage.
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