The Federal Government experienced a major revenue shortfall in the 2025 fiscal year, Finance Minister and Coordinating Minister of the Economy, Wale Edun, revealed on Tuesday.
While the government had initially projected a revenue of N40.8 trillion to fund the N54.9 trillion “budget of restoration”, which aimed to stabilise the economy and lay the foundation for long-term growth, actual receipts fell sharply to N10.7 trillion.
Edun made the disclosure during an interactive session with the House of Representatives Committees on Finance and National Planning on the 2026–2028 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).
The minister attributed the shortfall primarily to weak earnings from the oil and gas sector, particularly Petroleum Profit Tax and Company Income Tax, coupled with underperformance across several other revenue sources. “The current trajectory indicates that federal revenues for the year will likely close at around N10.7 trillion compared to the N40.8 trillion target,” he told lawmakers.
The revelation stands in contrast to a statement made by President Bola Tinubu in September, when he claimed the government had already met its revenue target. “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,” Tinubu had told members of The Buhari Organisation.
Edun explained that the revenue shortfall affected full implementation of the 2025 budget. Although borrowing brought in about N14.1 trillion, total inflows still fell short of what was required to fully fund the budget. Despite this, he said critical obligations—including salaries, statutory transfers, and domestic and foreign debt service—were met through careful and creative treasury management.
On expenditure performance, the minister stated that capital releases to ministries, departments, and agencies in 2024 reached N5.2 trillion out of N7.1 trillion, representing 73 per cent execution, while total capital expenditure, including projects funded by multilateral and bilateral sources, reached N11.1 trillion out of N13.7 trillion, or 84 per cent.
Edun cautioned that government spending plans heavily reliant on oil revenue must remain flexible. “We must be ambitious, but given the experience of the past two years, spending linked to these revenues must depend on the funds actually coming in,” he said.
Budget and National Planning Minister Atiku Bagudu added that the MTEF and FSP were prepared after extensive consultations with government agencies, the private sector, civil society, and development partners. He acknowledged that revenue assumptions remain debated within the Economic Management Team, with some advocating conservative projections based on past performance, while others favour ambitious targets to push revenue agencies to improve efficiency.
For the 2026 budget framework, although oil production remains targeted at 2.06 million barrels per day, a more cautious figure of 1.84 million barrels per day was used for revenue calculations.
Earlier, House Committee on Finance Chairman, James Faleke, urged a more realistic and critical approach to budgeting, warning against inflated budgets that are often poorly implemented.
Edun’s disclosure highlights the structural and cyclical challenges that continue to affect Nigeria’s revenue generation and fiscal stability.
