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The Federal Government recorded a revenue deficit of N2.79 trillion from oil earnings in the third quarter of 2025, sparking renewed worries over the nation’s fiscal outlook amid declining proceeds from the sector.

According to the Q3 2025 Budget Implementation Report, the government generated N2.45 trillion in oil revenue within the period, representing just 31.87 per cent of the projected quarterly target.

On the other hand, non-oil revenue surpassed expectations, raking in N5.25 trillion, which accounted for 68.18 per cent of the quarterly projection. The impressive performance was attributed to stronger collections from Value Added Tax, VAT, Electronic Money Transfer Levy, EMTL, Independent Revenue, and Education Tax.

The report revealed that total Federal Government revenue stood at N7.70 trillion, while expenditure was put at N8.03 trillion, resulting in a fiscal deficit of N328.57 billion.

Minister of Budget and Economic Planning, Senator Abubakar Atiku Bagudu, stated in the report that revenue shortfalls continued despite government efforts aimed at improving 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 further explained that despite mounting fiscal pressures, the government remained committed to prioritising capital investments while pursuing stronger domestic revenue mobilisation and fiscal sustainability.

The report disclosed that aggregate expenditure, including Government-Owned Enterprises and project-linked loans, amounted to N8.03 trillion compared to a prorated projection of N13.75 trillion.

Non-debt recurrent expenditure during the quarter stood at N2.66 trillion, while debt servicing accounted for N3.41 trillion, slightly below projections.

According to the report, the poor oil revenue performance was linked to volatility in production and pricing, warning that Nigeria’s fiscal condition remains exposed to shocks in the international oil market.

The report also raised concerns over the country’s high debt service-to-revenue ratio, noting that limited fiscal space continues to restrict government expenditure.

It further stated that delays in cash planning and other operational bottlenecks slowed project execution and heightened the risk of increasing project costs.

To strengthen fiscal management, the report recommended the adoption of more realistic oil production and pricing benchmarks, improved tax compliance measures, faster implementation of e-Customs, enhanced remittance of independent revenues, and stricter value-for-money audits on public projects.

The government also emphasised the need to prioritise high-impact projects capable of generating measurable economic returns as part of efforts aimed at improving fiscal sustainability.

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