The Nigerian federal government recorded a fiscal deficit of 2.66 trillion naira in the second quarter of 2025, according to the Budget Office of the Federation. The shortfall was financed through domestic borrowing. Federal revenue for the quarter totaled 5.97 trillion naira, while expenditure reached 8.63 trillion naira, creating the deficit.
The Second Quarter and Half‑Year 2025 Budget Implementation Report noted that the federal government prioritized non‑discretionary spending despite weak revenue performance. Oil production averaged 1.68 million barrels per day, well below the budget benchmark of 2.12 million barrels per day, which adversely affected revenue. Aggregate federal revenue stood at 5.23 trillion naira, representing 58.45 % of the prorated target for April‑June 2025. Oil revenue was 1.50 trillion naira (28.50 % of total revenues) but missed the target by 71.50 %. In contrast, non‑oil revenue amounted to 3.73 trillion naira (71.50 % of total revenues), exceeding projections thanks to higher Company Income Tax, Value Added Tax and Education Tax collections.
Aggregate expenditure, including government‑owned enterprises and project‑tied loans, was 8.63 trillion naira against a prorated budget of 13.75 trillion naira. Capital releases to ministries, departments and agencies totaled 393.86 billion naira, while non‑debt recurrent expenditure reached 2.72 trillion naira in the quarter. Debt service consumed 4.44 trillion naira, 24.10 % above projections, driven by domestic debt obligations.
Minister of Budget and Economic Planning, Senator Abubakar Bagudu, said that despite fiscal pressures the government continued to prioritize capital investment, emphasizing the need to strengthen domestic revenue mobilisation and ensure fiscal sustainability. The economy recorded real GDP growth of 4.23 % during the review period, driven mainly by services and non‑oil sectors, while inflation remained high at 22.22 %.
The report recommended aligning oil‑production assumptions with verifiable capacity, adopting more conservative price benchmarks, and deepening compliance enforcement to build fiscal resilience. It also called for institutionalising value‑for‑money audits and prioritising high‑impact projects with measurable economic returns. Finally, the debt‑management regime should aim to reduce the debt‑service‑to‑revenue ratio to sustainable levels in 2025 through revenue growth and concessional financing strategies.
Comments are closed for this story.