LunagisthubNigeria’s Revenue Crisis: A Threat to Economic Stability
The Federal Government of Nigeria is facing a severe revenue crisis, with debt service and personnel costs consuming over 105% of its total revenue for the first seven months of 2025. According to the 2026-2028 Medium-Term Expenditure Framework and Fiscal Strategy Paper, the government earned N13.67 trillion in aggregate revenue, falling short of the pro rata target of N23.85 trillion .
The revenue shortfall of N10.19 trillion, representing a 42.7% gap, is largely attributed to a steep drop in oil receipts. Oil revenue plummeted to N4.64 trillion, compared to the pro rata target of N12.25 trillion, resulting in a shortfall of N7.62 trillion or 62.2%. Other revenue streams, such as dividends from entities like the Nigeria Liquefied Natural Gas and development finance institutions, also underperformed, yielding only N104.64 billion against an expected N428.71 billion .
The revenue crisis contradicts President Bola Tinubu’s claim in September that Nigeria had met its revenue target for 2025 ahead of schedule and would no longer rely on borrowing to fund its budget. The President’s assertion has been disputed by the MTEF document, which highlights the severity of the revenue crisis .
The revenue crisis has significant implications for Nigeria’s economic stability and development. With debt service and personnel costs consuming a substantial portion of the government’s revenue, there may be limited resources available for capital projects and other essential public services. To address this challenge, the government may need to revisit its revenue projections and implement policies to boost non-oil revenue streams, such as company income tax, which has shown some resilience .
Lunagisthub
