The Nigerian Minister of Finance and Coordinating Minister of the Economy, Wale Edun says the Nigerian Government recorded a significant revenue shortfall in the 2025 fiscal year.
Edun made the disclosure while appearing before the House of Representatives Committees on Finance and National Planning during an interactive session on the 2026 to 2028 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).
According to him, “the Nigerian Government initially projected revenue of ₦40.8 trillion for 2025 to fund the ₦54.9 trillion “Budget of Restoration” aimed at securing peace and rebuilding prosperity.”
However, current performance indicates that total revenue for the year is likely to end at about ₦10.7 trillion.
The Minister attributed the shortfall largely to weak oil and gas revenues, particularly Petroleum Profit Tax (PPT) and Company Income Tax (CIT) from oil and gas companies, as well as underperformance in other revenue subheads.
“The current trajectory indicates that federal revenues for the full year will likely end at around ₦10.7 trillion, compared to the ₦40.8 trillion projection,” Edun said.
He noted that while the government had also borrowed about N14.1 trillion, the combined inflows remained far below what was required to fully fund the 2025 budget.
Despite the revenue gap, the Minister said the government had met key obligations through what he described as prudent treasury management.
According to him, “salaries, statutory transfers, and domestic and foreign debt servicing were paid as and when due through “skillful, imaginative and creative handling” of available resources.”
Providing an update on expenditure performance, Edun said capital releases to Ministries, Departments and Agencies in 2024 stood at ₦5.2 trillion out of a budgeted ₦7.1 trillion, representing 73 percent performance.
He added that total capital expenditure, including multilateral and bilateral projects, reached ₦11.1 trillion out of ₦13.7 trillion, or 84 percent.
The Minister cautioned that expenditure plans tied to oil revenues must remain flexible, warning against committing government resources based on projections that had consistently failed to materialise.
“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.
Also speaking, the Minister of Budget and National Planning, Atiku Bagudu said the MTEF and FSP were developed through extensive consultations with government agencies, the private sector, civil society organisations, and development partners.
Bagudu acknowledged debates within the Economic Management Team over revenue assumptions, noting that while some members supported conservative projections based on past performance, others favoured ambitious targets to push revenue agencies to improve performance.
He explained that “for the 2026 budget, the government retained an oil production target of 2.06 million barrels per day but adopted a more cautious assumption of 1.84 million barrels per day for revenue calculations.”
Bagudu urged revenue generating agencies to intensify efforts to improve collections.
The Chairman of the Committee, James Faleke, said that given the critical state of the economy, there was a need for thorough analysis to guard against bloated budgets and guide decision-making towards moving the country forward.