The Federal Government recorded a N2.79 trillion shortfall in oil revenue in the third quarter of 2025, raising fresh concerns over the country’s fiscal outlook amid declining earnings from the sector.
According to the Q3 2025 Budget Implementation Report, the government realised N2.45 trillion in oil revenue during the period, representing only 31.87 per cent of the projected target for the quarter.
In contrast, non-oil revenue outperformed expectations, generating N5.25 trillion or 68.18 per cent of the quarterly projection. The strong performance was driven by increased collections from Value Added Tax (VAT), Electronic Money Transfer Levy (EMTL), Independent Revenue, and Education Tax.
The report showed that total Federal Government revenue stood at N7.70 trillion, while expenditure amounted to N8.03 trillion, resulting in a fiscal deficit of N328.57 billion.
Minister of Budget and Economic Planning, Senator Abubakar Atiku Bagudu, noted in the report that revenue shortfalls persisted despite efforts to improve collections.
“Total FG revenue stood at N7.70 trillion, and expenditure reached N8.03 trillion, resulting in a fiscal deficit of N328.57 billion, financed through privatisation proceeds and domestic borrowing,” Bagudu stated.
He added that despite fiscal pressures, the government continued to prioritise capital investments while seeking to strengthen domestic revenue mobilisation and ensure fiscal sustainability.
The report indicated that aggregate expenditure, including Government-Owned Enterprises and project-tied loans, totalled N8.03 trillion, compared to a prorated projection of N13.75 trillion.
Non-debt recurrent expenditure stood at N2.66 trillion during the quarter, while debt servicing consumed N3.41 trillion, slightly below projections.
The report attributed the weak oil revenue performance to production and pricing volatility, warning that the country’s fiscal position remains vulnerable to shocks in the global oil market.
It also highlighted concerns over Nigeria’s elevated debt service-to-revenue ratio, noting that limited fiscal space continues to constrain government spending.
According to the report, delays in cash planning and other bottlenecks slowed project implementation and increased the risk of rising project costs.
To improve fiscal management, the report recommended more realistic oil production and price benchmarks, stronger tax compliance measures, accelerated implementation of e-Customs, improved remittance of independent revenues, and stricter value-for-money audits on public projects.
The government also stressed the need to prioritise high-impact projects capable of delivering measurable economic returns as part of broader efforts to strengthen fiscal sustainability.