The Federal Government has admitted that revenue performance for 2025 has fallen significantly below projections, raising concerns about the funding of the N54.9 trillion national budget.
According to the Minister of Finance, the government initially projected N40.8 trillion in revenue to finance the 2025 appropriation, tagged the “Budget of Restoration,” which was designed to stabilise the economy, secure peace and rebuild prosperity.
However, the minister disclosed that actual revenue inflows have underperformed expectations, with total receipts for the year now projected to close at about N10.7 trillion. The revelation highlights a wide gap between budgeted revenue assumptions and fiscal realities, underscoring the challenges facing government finances amid economic headwinds.
This unpredictability has forced the government to resort to heavy borrowing to fund expenditure commitments which not only increases public debt and debt-servicing costs, but also crowds out spending on critical sectors such as health, education and infrastructure, limiting the budget’s developmental impact.
Nigeria’s Growing Budget Shortfall
Recall that the Federal Government projected a revenue of N40.8 trillion to run the 2025 budget of N54.9 trillion but as it stands, FG may end the year with just N10.7 trillion as revenue.
The shortfall has raised questions about how the government plans to bridge the funding gap for the expansive budget, which includes spending on security, infrastructure, social services and economic recovery initiatives. Analysts warn that weaker-than-expected revenue could increase reliance on borrowing, worsen fiscal deficits and add pressure to Nigeria’s already strained public finances.
Nigeria could end up carrying over the 2024 budget to 2026, whereas the country has borrowed for 2026 upfront.
There has been renewed calls for stronger revenue mobilisation, improved tax administration and greater fiscal discipline to ensure the sustainability of government spending plans and protect the broader economy.
