By Erewunmi Peace

The Federal Government of Nigeria is projected to miss its 2025 revenue target by a wide margin, Finance Minister and Coordinating Minister of the Economy Wale Edun has disclosed. According to official figures presented before the House of Representatives’ committees on finance and national planning, actual revenues for the year are expected to fall far short of the projected figure, raising concerns about fiscal sustainability and budget implementation.

Edun told lawmakers on Tuesday that the government had initially forecast ₦40.8 trillion in revenue for the 2025 fiscal year — part of the ₦54.9 trillion “Budget of Restoration” aimed at stabilising the economy and financing key national priorities. However, he said that only about ₦10.7 trillion is now likely to be realised, leaving a shortfall of approximately ₦30 trillion.

Causes of the Revenue Shortfall

The minister attributed the steep revenue shortfall mainly to underperformance in oil and gas receipts, including lower-than-expected collections from Petroleum Profit Tax and Company Income Tax paid by oil firms. Several non-oil revenue streams also failed to meet their projected targets, compounding the funding gap.

Edun explained that even though the government raised about ₦14.1 trillion in borrowing during the year to help bridge budget financing gaps, total receipts still remained significantly lower than what was required to fully implement the budget.

Government Response and Budget Implications

Despite the revenue challenge, the minister noted that the government has continued to meet critical financial obligations, including salaries, statutory transfers to state and local governments, and domestic and external debt service, through careful treasury management.

Edun also warned fiscal planners and legislators against linking expenditure rigidly to optimistic revenue assumptions, especially those heavily dependent on volatile oil earnings. He urged that future spending plans should be based on more realistic revenue inflows.

As a result of the revenue gap, about 70 per cent of the 2025 budget’s capital components are expected to be rolled over into 2026, delaying implementation of key development projects and infrastructure programmes.

Legislative Reaction and Future Outlook

Lawmakers on the House committees expressed concern over the stark shortfall and emphasised the need for stronger revenue mobilisation strategies. The Chairman of the House Committee on Finance has urged revenue agencies, particularly the Federal Inland Revenue Service (FIRS), to aim for a more achievable ₦35 trillion revenue target in the 2026 fiscal year.

The shortfall has also intensified scrutiny of fiscal policy assumptions used in Nigeria’s revenue projections, particularly around oil price benchmarks, production estimates, and tax performance.