FG’s N30trn revenue shortfall in 2025 heightens budget, debt pressures

Nigeria’s Federal Government suffered a revenue shortfall of about N30trn in the 2025 fiscal year, a setback that is raising concerns over budget execution, rising debt exposure and the country’s broader economic stability.

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, disclosed the development on Tuesday while appearing before the House of Representatives Committees on Finance and National Planning.

Edun said the Federal Government had projected revenues of N40.8tn for 2025 but is now expected to end the year with actual inflows of only about N10.7trn.

The disclosure was made during deliberations on the 2026–2028 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).

According to the minister, the ambitious revenue target was intended to finance the N54.9tn 2025 “budget of restoration,” which was crafted to stabilise the economy, strengthen security and set the stage for sustainable growth.

However, he acknowledged that weak fiscal performance had severely undermined those objectives.

“Based on current trends, total federal revenues for the year are likely to end at around N10.7tn, far below the N40.8tn that was projected,” Edun told lawmakers.

He attributed the gap largely to subdued oil and gas revenues, particularly Petroleum Profit Tax and Company Income Tax from oil companies, alongside persistent underperformance across several non-oil revenue streams.

Edun’s comments contradict President Bola Tinubu’s earlier assertion in September that the Federal Government had already achieved its 2025 revenue target ahead of schedule.

“Today I can stand here before you to brag: Nigeria is not borrowing. We have met our revenue target for the year and we met it in August,” the president had said during a meeting with members of The Buhari Organisation at the Presidential Villa.

The finance minister admitted that the revenue gap significantly constrained the implementation of the 2025 budget. He said that even with about N14.1tn raised through borrowing, total resources remained insufficient to fully fund the N54.9tn spending plan.

Nevertheless, Edun said the government had continued to meet key obligations, including payment of salaries, statutory transfers and domestic and foreign debt servicing, through what he described as prudent and innovative treasury management.

On expenditure performance, he noted that capital releases to ministries, departments and agencies in 2024 amounted to N5.2tn out of a budgeted N7.1tn, representing 73 per cent implementation. Total capital spending, including projects funded by multilateral and bilateral partners, reached N11.1tn out of N13.7tn, or 84 per cent.

Edun cautioned against basing expenditure plans on overly optimistic oil revenue assumptions, warning that such practices pose long-term risks to fiscal sustainability.

“We must be ambitious, but our spending must be anchored on revenues that actually come in, given the experience of the past two years,” he said.

Also speaking at the session, the Minister of Budget and National Planning, Atiku Bagudu, said the MTEF and FSP were developed after extensive consultations with key stakeholders, including government agencies, the private sector, civil society groups and development partners.

Bagudu said revenue assumptions remained a contentious issue within the Economic Management Team, with debates between those advocating conservative projections based on historical trends and others favouring ambitious targets to drive improved revenue mobilisation.

He disclosed that while an oil production target of 2.06 million barrels per day was retained for policy planning, a more conservative benchmark of 1.84 million barrels per day was adopted for revenue estimates in the 2026 budget framework.

Earlier, the Chairman of the House Committee on Finance, James Faleke, urged the executive arm to adopt a more realistic approach to budgeting, warning that inflated projections often result in weak implementation, abandoned projects and widening fiscal deficits.