Development analysts say the federal government is facing a huge N30 trillion revenue shortfall in fiscal year 2025, highlighting deep weaknesses in fiscal management and corruption that hamper revenue mobilization.
The revelations contrast with official optimism expressed in September, when President Bola Tinubu said the government had already met its 2025 revenue target by August, citing reforms and improved non-oil sector performance.
The President had stressed that his administration's Renewed Hope Agenda has prioritized critical infrastructure, health improvement, food security and enhanced security for Nigerians.
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“We have met our revenue target for the entire year, and we did it in August. Nigeria is not borrowing a dime from local banks. The economy is stable; no one is trading pieces of paper for the exchange rate anymore,” the President said in early September during a meeting with former members of the defunct Congress for Progressive Change (CPC) at the Presidential Villa in Abuja.
But contrary to his claim, the Minister of Finance and Coordinating Minister of Economy, Wale Edun, during an interactive session with lawmakers on Monday, admitted that the government has generated only N10 trillion against the estimated N40 trillion.
This liquidity crisis has led to 70 percent of 2025 capital projects being postponed to 2026, leading to protests by local and international contractors over unpaid bills and doubts over budget execution.
Despite repeated assurances of economic recovery, analysts say the revenue shortfall points to a deepening fiscal crisis, persistent mismanagement and weak transparency.
They argue that revenue leakage remains massive, even as government agencies are reporting successes, leading the administration to rely heavily on borrowing with National Assembly approval, including the issuance of Eurobonds.
Jide Ojo, a renowned public affairs analyst, described the shortfall as a clear indication of Nigeria's liquidity crisis, which shatters the narrative of a rebound economy.
He criticized revenue leakages and mismanagement and noted the irony of new loans despite alleged target hits.
“The chickens are coming home to roost. The concerns raised by many financial experts and economists about the poor state of the Nigerian economy have finally been acknowledged, even if indirectly,” Ojo told BusinessDay.
He recalled Tinubu's September claim to meet the entire 2025 target, which had fueled skepticism over the lag in capital expenditure. “You know, by September, the President was assuming that the government had met its revenue projections for 2025. And people have asked the question, if you have done that, why has the capital component of the 2025 budget not been funded, to the extent that local and international contractors are now protesting over non-payment for their contract awards?”
Ojo linked the situation to the 70 percent capital moratorium, calling it a red flag on planning and implementation. He described the 2026 budget as premature, lacking a foundation beyond salary payments, and urged greater transparency.
“This is very worrying. We are now carrying over 70 per cent of capital projects into the new year. So, there is no basis for even putting a 2026 budget in the first place. There is no basis. Except, perhaps, salaries.”
BudgIT Deputy Country Director Wahyla Kwaga attributed the shortfall in revenue to weak monitoring in the revenue collection chain. He urged strict prioritization of capital expenditure to reduce delays and cautioned that heavy borrowing could put further pressure on domestic financial markets.
“We recently liquidated our Eurobonds. Yes, we were able to liquidate some, but by borrowing new ones. So, we are still stuck in that cycle of repayment,” he said.
Kwagga stressed that personnel costs will remain, but without self-sustaining returns capital allocation remains unclear.
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“For existing projects, of course, personnel will be taken care of, but it is not clear how well the government will be able to prioritize its capital expenditure regime, because for every naira, it must be able to pay itself back. And the government does not pursue the revenue growth regime as aggressively as it should.”
He advocated business-friendly policies to unlock company income tax, as well as boost VAT and levies by affluent citizens, especially with the new tax laws from January 1.
For his part, CISLAC Executive Director Awal Musa Rafsanjani condemned the shift from consumption to production for revenue growth, waste, resource mismanagement and the hostile environment that leads to the closure of companies.
He criticized the parasitic economy, where borrowing exceeds revenues despite claims of reform.
“We are running a very parasitic economy. So, it is not surprising that the government is coming up with these, but they are telling people that the economy has improved. Despite huge borrowing they have not been able to finance the Budget of 2025. So, why are we borrowing?” Rafsanjani asked.
He argued that revenues were increasingly being used to service debt without generating growth and called for an end to reckless borrowing.
