Business & Economy

Federal Government Eyes N36tn Revenue Growth

Published by
Esther Agbor

 

The Federal Government has outlined its strategy to achieve an ambitious N36.35 trillion revenue target for 2025, hinging on a series of transformative economic reforms under President Bola Tinubu’s administration.

During a session with the National Assembly Joint Committees on Finance, the Minister of Budget and Economic Planning, Abubakar Bagudu, shared the government’s roadmap to fiscal sustainability. Speaking in Abuja on Monday, Bagudu emphasized that policy shifts, such as the removal of fuel and foreign exchange subsidies, are pivotal to the projected revenue boost.

He highlighted that these reforms, aimed at correcting economic distortions, have begun to show results, with early benefits already visible in the Federation Account as of October 2023. According to Bagudu, the subsidy removals have not only improved government earnings but have also enhanced fiscal efficiency across the three tiers of government.

“The 2024 budget is this administration’s first full-year budget, and lessons learned from 2024 have formed the basis of the assumptions in 2025.

“The principal among those assumptions and lessons was the removal of the fuel subsidy and its effect on revenue and expenditure, the removal or deregulation of the foreign exchange market and its impact on both government revenue and spending, and other price-distorting issues, such as electricity, which has not been fully dealt with.

“All the major, bold, and courageous steps taken with the support of the National Assembly are intended to generate more revenues for the three tiers of government, correct distortions in the economy, and improve expenditure efficiency so that we can ensure that the revenue generated goes a long way,” Bagudu said.

The administration has directed revenue-generating Ministries, Departments, and Agencies (MDAs) and Government-Owned Enterprises (GOEs) to intensify efforts in mobilizing funds. This push is part of a broader plan to cover the N49.74 trillion expenditure proposed in the 2025 Appropriation Bill, despite a projected deficit of N13.08 trillion.

Beyond subsidy reforms, the government is targeting increased crude oil production, projecting an output of 2.06 million barrels per day at a benchmark price of $75 per barrel and an exchange rate of N1,500 to the dollar. These assumptions form the basis of the 2025 Medium-Term Expenditure Framework and Fiscal Strategy Paper, already approved by the National Assembly.

Bagudu noted the administration’s strides in addressing structural inefficiencies, such as electricity pricing, which remains a work in progress. He asserted that these bold steps, backed by the legislature, are designed to stabilize the economy and enhance revenue generation. Despite revenue fluctuations in 2024, the full impact of these reforms became evident by October. Moving forward, the government is however poised to sustain a more predictable and stable revenue profile.

Bagudu expressed optimism that with continued legislative support and a focus on strengthening MDAs and GOEs, the Tinubu administration will achieve its ambitious fiscal targets.

Esther Agbor

Esther is a graduate of History and International Relations. She writes on healthcare and the impact of economic policy on society.

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