Business
Budget: FG to earn N60trn from 3 agencies against N34trn target
– Possibility of budget surplus is academic – Dr. Nwani
Federal government’s top revenue agencies, the Federal Inland Revenue Service (FIRS), the Nigerian National Petroleum Company (NNPC) Limited, and the Nigeria Customs Service (NCS), may hit N60.9trn revenue target in 2025, nearly double the N34trn projected revenue in the year’s Appropriation Bill.
In 2024, the three agencies raked in N37 trillion, which was above the target for the fiscal year. Should they repeat similar feat in 2025, they could amass over N60.9 trillion. But analysts say given that the value of the naira has dropped significantly from 2023, the revenue figures are still quite insignificant in real terms, and may not stop government borrowing.
President Bola Tinubu had in December presented a budget proposal of N47.90trn, tagged “Budget of Restoration” to the National Assembly.
According to the president, the government was targeting N34.82 trillion in revenue to fund the budget, which is N3 trillion below what was generated in 2024. Government expenditure in the same year, he said, is projected to be N47.90 trillion, including N15.81 trillion for debt servicing.
Tinubu also noted that a total of N13.08 trillion or 3.89% of GDP, will make up the budget deficit, noting that the budget will consolidate on key reforms, such as the new minimum wage, duty-free food imports, and tax updates.
But with key revenue generating agencies of government having already in 2024 exceeded the 2025 revenue projection in 2024, even as they are expected to do better in 2025, there are already suggestions that budget surplus could be in the offing. However, for Dr. Vincent Nwani, economist and investment specialist, that’s only academic.
“With regard to Nigeria tending towards a budget surplus in 2025, it is neither here nor there. And I think it will be nice if you move away from fancy statistics to actual realities,” Nwani said. “If you look at the budget benchmarks, you find out that it will be difficult to achieve that budget surplus.
“And then when we talk about the 2025 budget of about N47.9 trillion, the real value is actually less than our 2022 budget. So, even if we are having budget surplus now because of naira devaluation, is it really a real surplus? When I see that N47.9 trillion budget, I am a bit worried because by now Nigeria should be doing N100 trillion, considering the fact that our currency has depreciated rapidly.”
Nigeria’s daily crude oil production reached 1.7 million barrels per day in November 2025, the highest level the country has attained in years, and 300,000 shy of the 2m budget benchmark. With President Tinubu holding meetings with Ogoni leaders with a view to restarting oil exploration in the area, perhaps the target may be met in the near future.
Meanwhile, of the N60.9 trillion expected revenue, the FIRS is projected to generate the lion share at N25 trillion; the NNPC, which made a revenue of about N13.1trillion in 2024, above its projected revenue of N12.3 trillion for the year, is had initially flaunted N23.7 trillion for the year, about 52 percent or N13trn goes to the federal government; while Customs which raked in N6.1 trillion in 2024, a significant 90.4 percent increase from its 2023 collection of N3.2 trillion, and 20.2 percent rise above the projected N5.07 trillion revenue for the year, now has N12 trillion revenue target for 2025 set for it by the National Assembly. But analysts say it’s quite a stretch.
2024 budget performance
With this impressive revenue outcome, many people are surprised at the dismal performance of the 2024 budget at 18 percent capital and over 70 percent recurrent. Experts say that essentially, the 2024 budget was focused on wasteful spendings, which were not capture in the budget. The question is, how revenue was exceeded yet the budget failed so spectacularly to address critical areas of concern on the issues of growth and poverty to alleviate the hardship in the country caused by poor infrastructure and high cost of living.
This made members of the National Assembly, in the general debate on the principles of the budget, to question such poor performance, especially for capital expenditure, while the recurrent expenditure recorded almost full performance.
Noteworthy is also the fact that there are three budgets running simultaneously, which is not only unusual, but confusing, as revenue deployment is difficult to trace and monitor, which bear credence to allegations that corruption is still pervasive in the government. Otherwise, how could we have built a deficit of N9 trillion and still record a revenue generation level that surpassed budget projections.
Another implication of this situation is that government may have embarked on several extra-budgetary expenditures that were not captured in the budget, nor appropriated for in the budget, which ordinarily is an impeachable offence.
However, it should be noted that the nation’s debt profile dropped significantly during the year, and this may explain the inconsistency in the revenue outlay for the year. According to the World Bank, the debt stock dropped from about 98 percent in 2023 to 50 percent at the end of 2024, which marks a remarkable improvement in the economy, as less debt service obligations would allow for more revenue for capital expenditure.
FIRS targets N25trn revenue
The Federal Government had earlier last month, mandated FIRS to generate N25.2 trillion in tax revenue for the 2025 fiscal year, following the agency’s historic achievement in 2024 in which it collected N21.7 trillion, surpassing its N19.4 trillion goal.
This is as the National Assembly Joint Committee on Finance fortnight ago, commended the agency for surpassing its revenue target for last year, while also proposing a N25 trillion tax collection or revenue generation target for it in the 2025 appropriation bill.
Explaining the tax revenue performance over the years, the Coordinating Director of the Large Taxpayers Group, Amina Ado, attributed the sustained growth in tax collections to a combination of administrative reforms, policy adjustments, and macroeconomic factors.
According to her, several major administrative reforms, including the automation of tax processes, the introduction of the TaxProMax platform, the use of third-party data for intelligence gathering, expanded application of Withholding Tax (WHT), improved debt collection strategies, and extensive organizational restructuring contributed to this.
Policy reforms, she said, also played a significant role, with measures, such as an increase in the Value Added Tax (VAT) rate, adjustments to Education Tax rates, and improvements in tax laws through the enactment of Finance Acts. Additionally, she said macroeconomic factors, such as fluctuations in the exchange rate and inflation, contributed to the revenue surge.
The performance across various tax categories in 2024 revealed remarkable growth: under Company Income Tax (CIT), the expiration of tax exemptions on Treasury Bills and Corporate Bonds, the removal of the 10 percent investment allowance, and improved remittances from government entities all contributed to higher CIT collections.
In the case of Stamp Duties (SD), debt collection efforts intensified, and government receipts increased, leading to substantial revenue growth. The recognition of 2023 tax liabilities in 2024, higher compliance levels, and exchange rate influences contributed to increased collections under the NASENI/PTF Levies.
Comparing 2023 and 2024, all tax types recorded significant improvements. Oil-related tax revenue grew by 35 percent, while non-oil tax collections surged by 97 percent. Overall, total tax revenue increased by an impressive 76 percent.
Under the Stamp Duties category, the volume of transactions grew by 16 percent, while revenue collections soared by 149 percent.
Similarly, the integration of tax offices and the conclusion of audit cases resulted in a 62 percent increase in assessments and an 83 percent rise in tax collections. Notably, the FIRS’ debt recovery efforts in 2024 yielded a 119 percent improvement compared to the previous year.
FIRS’s strategy for 2025 target
With a N25.2 trillion revenue target for 2025, the FIRS says it is setting its sights on even greater efficiency and innovation in tax collection.
The Service intends to consolidate on past achievements by reinforcing its workforce through enhanced capacity-building programmes, upgrading its technological infrastructure, and strengthening its institutional framework to ensure sustained compliance and efficiency in tax administration.
The agency last week, outlined a strategic roadmap, centred on three pillars. Speaking at a Strategic Management Retreat in Abuja, on Thursday, it Chairman, Zack Adedeji, identified the pillars as “Capacity building, and training; infrastructure and facility enhancement; and technological advancement.
He added that the pillars are practical, actionable objectives that will be realized in every group, department, and operation within the service.
According to him, the new target followed the N21.6 trillion revenue generated in 2024, significantly exceeding the year’s target of N19.4 trillion.
Adedeji said 2024 was a year in which his team positioned the organization to become “a globally recognized, efficient, and trusted revenue authority,” with a determination to grow the nation’s economy.
Also speaking at the event, Amina Ado identified automation, introduction of TaxProMax, the use of third-party data for intelligence, expanded use of withholding tax, improved debt collection, and organizational reforms as some of the factors responsible for the Service’s high performance.
She revealed that in 2024, all non-oil tax types surpassed their targets. “Comparing 2023 to 2024, all tax types performed better in 2024; oil taxes increased by 35%, non-oil taxes increased by 97%, and the overall increase was 76%.
NNPC to exceed last year’s N13.1trillion record
Mr. Mele Kyari, the Group Managing Director of NNPC, had disclosed during an interactive session Federal Government’s revenue generating agencies had with the National Assembly’s joint Committees on Finance, Budget and National Planning on 2025-2027 Medium Term Expenditure Frame Work (MTEF) and Fiscal Strategy Paper (FSP) in November last year, that: “For the 2025 fiscal year, N23.7 trillion is projected by NNPCL to be remitted into the federation account.” The federal government receives 52 percent of the Federation account.
Kyari noted at the time that the company exceeded the N12.3 trillion revenue projected for 2024 by already raking in N13.1trillion.
However, he has since walked back on the projection, noting during his presentation before the joint committee on Finance of both Chambers at the National Assembly complex on Wednesday, January 15, that the company’s revenue projection for 2025 fiscal year was not ready.
Kyari said the projection will be revealed after the meeting of board of directors of the company in two weeks time. He, however declared that the company remitted N10 trillion to the federation account as at September, 2024, while assuring that the NNPCL would conduct a forensic audit on money spent by it for stabilization of price of Petrol from January to September 2024 and uninterrupted supply of the product.
“Until 1st October 2024, NNPCL as mandated by the Petroleum Industry Act (PIA), acted as the supplier of last resort on fuel supply, which requires forensic audit to know how much NNPCL is being owed or owing any agency,” he had said.
“Our transactional account is very transparent, which is published on yearly basis , making NNPCL, the only company in Nigeria noted for that and also the highest tax payer in the country as well as highest payer of royalty and dividends to share holders as a commercial national oil companies.”
With improvement in oil production, the state oil company is expected to do much better in 2025. The N23.7 mooted by Kyari is not out of reach, according to Dr. Nwani, who argues that the company should be doing a lot better.
“NNPC is the equivalent of Saudi Aramco, which reported $121bn profit in 2023, but NNPC made only $2.1bn in 2023. We should go there and learn how those strategic institutions are functioning effectively, being able to attract investments from all over the world.
“NNPC has been privatized. If it was done properly, by now investors would be trooping into the country with foreign direct investments. So, this N47.9 trillion that is our total budget for the year, only NNPC should be generating it if we are being serious.”
Customs targets N12 trillion
The National Assembly fortnight ago, increased the Nigerian Customs Service’s 2025 revenue target to N12 trillion, double the N6.1 trillion proposed by Adewale Adeniyi, the Comptroller-General of the Service.
The decision, made by Sani Musa, chairman of the Joint Finance Committee, was based on data from the Budget Office, which indicated that the target was possible.
This comes amid suggestions in some quarters that the agency has consistently underprojected its revenue generation capacity because it had always surpassed every projection.
“N6.1 trillion they did last year is just about $4bn, that’s poor for a regional power house like Nigeria,” said analyst Steve Akintomide. “But that’s not to say they should be imposing more duty on imports when businesses are already suffering. The point is that the ports can be more efficiently run.”
Regardless, while the lawmakers are optimistic about meeting the target, experts in the maritime and trade sectors have expressed concern, warning that the decision could worsen industry problems and strain businesses already grappling with economic challenges.
“Part of the source of high inflation is the high cost of imports. The National Assembly should also be sensitive enough to bring relief to businesses and citizens. This action is certainly going to worsen the plight of businesses. Because as the Customs struggle to meet this target, it is the businesses and citizens that will pay for it,” said Dr. Muda Yusuf, chairman of the Centre for Promotion of Private Enterprise (CPPE).
According to Yusuf, businesses are already under pressure from foreign exchange volatility, high energy costs, and weak purchasing power.
He noted that reducing the cost of cargo clearing would be a better move to ease inflation and support economic recovery.
