ABUJA — The Federal Government faces a severe revenue shortfall, with projected income for 2025 expected to reach only about ₦10.7 trillion against a budget target of ₦40.8 trillion, the Minister of Finance and Coordinating Minister for the Economy, Mr. Wale Edun, disclosed on Tuesday.
The alarming gap—approximately ₦30.1 trillion—threatens the full implementation of the 2025 “Budget of Restoration,” valued at ₦54.9 trillion, and underscores persistent vulnerabilities in the nation’s fiscal framework, particularly in the oil and gas sector.
Edun revealed the figures during an interactive session with the House of Representatives Committees on Finance and National Planning, convened to review the 2026–2028 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).
He attributed the drastic shortfall primarily to the underperformance of key revenue streams, especially Petroleum Profit Tax (PPT) and Company Income Tax (CIT) from oil companies, which have fallen far below projections.
“Based on present trends, federal revenue for the year is projected to close at approximately ₦10.7 trillion, far below the ₦40.8 trillion target,” Edun told lawmakers.
To bridge part of the gap, the government has raised ₦14.1 trillion through borrowing. Despite the fiscal strain, Edun assured that the administration has maintained payment of salaries, statutory transfers, and debt servicing through “careful and innovative treasury management.”
Spending Performance and Caution
On expenditure,the Minister reported that capital releases to Ministries, Departments, and Agencies (MDAs) in 2024 reached ₦5.2 trillion out of ₦7.1 trillion appropriated—a 73% implementation rate. When multilateral and bilateral-funded projects are included, total capital spending was ₦11.1 trillion out of ₦13.7 trillion budgeted, representing 84% performance.
Edun urged fiscal realism, cautioning against rigid expenditure commitments based on optimistic oil revenue forecasts. “We must aim high, but experience over the past two years shows that spending should be guided by revenues that actually materialise,” he stated.
Divergent Views on Future Projections
Also speaking,the Minister of Budget and National Planning, Senator Atiku Bagudu, acknowledged internal disagreements within the Economic Management Team regarding revenue assumptions. He noted some members advocated conservative estimates based on historical data, while others pushed for ambitious targets to drive revenue agencies toward higher performance.
For the 2026 projections, Bagudu said the government maintained an oil production target of 2.06 million barrels per day but adopted a more prudent revenue assumption of 1.84 million barrels per day. He urged revenue-generating agencies to intensify collection efforts.
Lawmakers Emphasize Scrutiny
Earlier,the Chairman of the House Committee, Rt. Hon. James Faleke, stressed the necessity for thorough scrutiny of the nation’s fiscal plans. He emphasized that, given current economic realities, careful analysis is essential to prevent inflated budgets and to support sound decision-making for national progress.
The revelation highlights the ongoing challenge of aligning Nigeria’s ambitious budget goals with its volatile revenue base, setting the stage for difficult fiscal choices in the coming years.
