₦airaland Forum

The Federal Government has recorded a wide revenue shortfall in the 2025 fiscal year, raising fresh concerns about the sustainability of Nigeria’s public finances, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has said.

Mr Edun stated this on Tuesday during an interactive session with the House of Representatives Committees on Finance and National Planning.

The session was convened to discuss the 2026–2028 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).

The appearance followed the transmission of the MTEF and FSP to the House by President Bola Tinubu last Wednesday for legislative consideration and approval.

According to the minister, the federal government had projected ₦40.8 trillion in revenue for 2025 to finance the ₦54.9 trillion “budget of restoration,” which was designed to stabilise the economy, secure peace, and rebuild prosperity.

However, he said actual revenue performance had fallen significantly short of expectations, with total inflows for the year now projected to close at about ₦10.7 trillion.

“The current trajectory indicates that federal revenues for the full year will likely end at around ₦10.7 trillion, compared with the ₦40.8 trillion that was projected,” Mr Edun told the lawmakers.

He attributed the shortfall largely to weak oil and gas revenues, particularly lower-than-expected collections from Petroleum Profit Tax and Company Income Tax paid by oil and gas companies.

The minister also cited underperformance across several non-oil revenue subheads, compounding the pressure on government finances.

Mr Edun disclosed that the government had borrowed about ₦14.1 trillion during the year in an effort to bridge the funding gap created by the revenue shortfall.

Even with the additional borrowing, he said, combined inflows remained far below the level required to fully fund the 2025 budget, increasing the strain on treasury operations and fiscal planning.

The revenue challenge, he noted, underscored the vulnerability of Nigeria’s public finances to oil price fluctuations, production shortfalls and structural weaknesses in revenue mobilisation.

Despite the revenue squeeze, the finance minister said the government had continued to meet its key obligations through what he described as prudent and disciplined treasury management.

He told lawmakers that salaries, statutory transfers to subnational governments and critical domestic and external debt service obligations had been paid as and when due.

This, he said, was achieved through careful cash management and the creative sequencing of available resources to prioritise essential expenditures.

Capital spending performance
Providing an update on expenditure performance, Mr Edun said capital releases to Ministries, Departments and Agencies in 2024 stood at ₦5.2 trillion out of a budgeted ₦7.1 trillion, representing about 73 per cent performance.

He added that when multilateral and bilateral-funded projects were included, total capital expenditure amounted to ₦11.1 trillion out of ₦13.7 trillion, or approximately 84 per cent.

The figures, he said, reflected the government’s efforts to sustain investment in critical infrastructure despite fiscal headwinds.

Warning on oil-dependent spending
The minister cautioned against rigid expenditure commitments tied to oil revenues, urging lawmakers and fiscal planners to adopt a more flexible approach to budgeting.

He warned that over-reliance on optimistic oil projections had repeatedly created budget implementation challenges in recent years.

“We must be ambitious, but given the experience of the past two years, spending linked to these revenues must be based on what actually comes in, not what we hope to earn,” Mr Edun said.

Revenue assumptions and fiscal outlook
Also addressing the committees, the Minister of Budget and National Planning, Atiku Bagudu, said the 2026–2028 MTEF and FSP were developed after extensive consultations with government agencies, the private sector, civil society organisations and development partners.

Mr Bagudu acknowledged internal debates within the Economic Management Team over revenue assumptions, noting a tension between conservative projections based on historical performance and more ambitious targets aimed at compelling revenue-generating agencies to improve collections.

He explained that while the government retained an oil production target of 2.06 million barrels per day for the 2026 budget, it adopted a more cautious production assumption of 1.84 million barrels per day for revenue calculations.

According to him, the revised assumption was intended to reduce the risk of revenue shortfalls and improve the credibility of fiscal projections.

Mr Bagudu also urged revenue-generating agencies to intensify efforts to expand collections, improve compliance and block leakages.

Lawmakers urge fiscal discipline
Earlier, the Chairman of the House Committee on Finance, James Faleke, said the fragile state of the economy required rigorous scrutiny of fiscal assumptions to avoid inflated budgets detached from economic realities.

He emphasised the importance of critical analysis of revenue and expenditure projections to inform policy decisions and ensure that limited resources are deployed efficiently.

Mr Faleke said lawmakers would closely examine the MTEF and FSP to ensure that fiscal targets were realistic and aligned with Nigeria’s current economic conditions.

Twist4u:
It was Daniel Bwala the current APC SPOKE PERSON on policy, that said "Even if you give Tinubu 30 years in power nothing will happen"

Fact is "A man cannot give what he does have"

Nigeria is truly a confirm "DISGRACED COUNTRY"

Anither563:
This is quite understandable given the scale of the reforms being implemented. The focus is on fiscal discipline and sustainable growth, not just on meeting targets for the sake of it.

matify83:
Someone should please explain how we dropped from meeting revenue target since August to having a 30 trillion naira shortfall in projected federal revenue.

How does the government want us to take them seriously when the president keeps lying barefaced to the Nigerians and foreign portfolio investors?

I have noticed that every time baba goes off script during public speakings, catastrophic gaffes always follows.

At this rate, Nigeria should just file for bankruptcy at the world Bank and join the league of Argentina, Venezuela, Iran and Lebanon.

nairalanda1:
Considering that tax to gdp is very low, there is no way they will meet revenue targets.

Also, considering that oil has been below 70 dollars per barrel for most of the year too, and that we even need it to be at least 150 dollars per barrel before we 'see something'..

There is a reason why our governments borrow. Most nigerians don't pay tax to federal coffers because poverty. As at 2016, about 16% of the taxable population was paying tax to the treasury. It's now about 30% (government says 44%).

Well, since most people don't want to pay tax because we are poor and because we cannot tax our way to prosperity (tax revenue is not used for prosperity, it's used for meeting government needs, etc)...may we continue to miss our revenue goals.

People will read this and say I am excusing government. LOL. If obi was in power, I would be saying the same thing. Tinubu is still not a good president, but my metrics for saying so are different.

Sheuns:
Tax poor people abi?

Is it not people that have good income that can be taxed? Or do you want to tax a bike rider that earns less than 80k in a month.

Or a gateman that is paid 30k a month?

Pls tell us who you expect the govt to tax aside the working class, business they already taxing.

nairalanda1:
Yep, as i said.

In other words, you have just told me that tinubu should keep borrowing, which is as expected from a APC supporter.

As for me, I believe in reality. Sane societies charge tax, societies that want to borrow, don't.

But you guys live in a society where your view of government is patronage, not development.

Anyway, good morning. You can mock me now.

Sheuns:
How did you deduce I’m APC supporter?

The only solution you proffer is borrowing.

Why not ask the government to cut spending by 90% and let’s see the results?

poiZon:
They r still pegging the budget on oil, oil and oil...
Not Gold, Tin or columbite.
Osun, Ekiti nor ogun states have oil, but they r so quick to rubbish Niger Deltans with ogogoro talk when we r the saviour of this fail contraption.

I blame the leaders of Niger delta, they accept peanut from these fail accountants...

Omooba77:
How do we generate enough revenues, Nlfpmod.......
Our budget projections too unrealistic..........

poiZon:
Tinubu came not only to steal but to also destroy and wreck havoc on the lives and properties of Nigerians...

From February this year, there's a 50naira levy CBN charges on every transaction that is above 10thousand naira.
You receive 10k, you r charge 50 naira, you withdraw 10k, they charge the POS 50naira.
In a day there r more than 2million transactions bove 10k in Nigeria.. 2million multiply by 50naira is 100million naira, multiply it by 30days in a month, thats 3Trillion naira.
This is the tenth month since cbn introduced that policy, CBN should be talking about 30trillion in revenue from that singular policy...
Yet they have a short fall of 30Trillion..

Anither563:
This is quite understandable given the scale of the reforms being implemented. The focus is on fiscal discipline and sustainable growth, not just on meeting targets for the sake of it.