Nigeria records ₦30tn revenue shortfall, collects just 25% of target

The federal government will fall short of its 2025 revenue target by about ₦30 trillion, achieving barely a quarter of what it planned to raise to fund the national budget, Finance Minister and Coordinating Minister of the Economy Wale Edun has said.

Mr Edun said this on Tuesday during a 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), Premium Times reported.

The government had projected ₦40.8 trillion in revenue for 2025 to finance its ₦54.9 trillion “budget of restoration”. Actual revenue performance has fallen sharply below expectations.

President Bola Tinubu earlier said in August his government had achieved its revenue target.

“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,” Edun told lawmakers.

Oil and non-oil underperform

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

He said several non-oil revenue lines also underperformed, compounding pressure on government finances and limiting fiscal space.

To plug the gap, the government borrowed about ₦14.1 trillion during the year. Still, total inflows remained far below what was required to fully fund the budget, increasing strain on treasury operations and fiscal planning.

Edun said despite the squeeze, the government continued to meet key obligations through what he described as “prudent and disciplined treasury management”.

He told lawmakers that salaries, statutory transfers to states and local governments, as well as critical domestic and external debt service obligations, had been paid.

Capital spending update

On expenditure performance, the minister 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.

When multilateral- and bilateral-funded projects were included, total capital expenditure rose to ₦11.1 trillion out of ₦13.7 trillion, or roughly 84 per cent, reflecting efforts to sustain infrastructure investment despite fiscal headwinds.

Mr Edun cautioned lawmakers against rigid spending commitments tied to oil revenues, warning that overly optimistic assumptions had repeatedly disrupted budget implementation.

“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,” he said.

Also speaking, 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 and development partners.

He said while the government retained an oil production target of 2.06 million barrels per day, it adopted a more cautious assumption of 1.84 million barrels per day for revenue calculations to reduce the risk of future shortfalls.

Why this matters

The revenue miss comes as global oil prices fell sharply this week, renewing concerns about Nigeria’s ability to fund the 2026 budget. With oil still central to government income, weaker prices could deepen borrowing, raise debt risks and force spending cuts or delays, underscoring the urgency of fixing Nigeria’s fragile revenue base.