FG records N6.9trn revenue in Q1 2025, falls short of target despite 33% growth

The Federal Government has reported a revenue performance of ₦6.9 trillion in the first quarter of 2025, reflecting a 33% increase compared to the ₦5.2 trillion generated in Q1 2024.

Despite this impressive year-on-year growth, the figure falls short of the pro-rata revenue target of ₦10 trillion, representing a ₦3.1 trillion shortfall, or 31% below expectations.

This gap raises concerns about the government’s ability to meet its fiscal obligations, with debt financing likely to be explored as a stop-gap measure. As of December 31, 2024, Nigeria’s total public debt had already reached ₦144.67 trillion, according to data from the Debt Management Office (DMO).

President Bola Tinubu, in late May, requested the National Assembly’s approval to secure fresh $24.14 billion. The new loan might have pushed the nation’s total debt to N183 trillion.

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Wale Edun, minister of finance and coordinating minister of the economy, stated this during the Q2 2025 Citizens and Stakeholders’ Engagement Session in Abuja, where he outlined the administration’s efforts to stabilise the economy, curb inflation, boost investment, and rebuild confidence in Nigeria’s fiscal outlook.

He noted that the jump in revenue reflects the early gains of ongoing economic and institutional reforms.

He noted that the administration is now targeting a seven percent gross domestic product (GDP) growth rate, leveraging improved revenue collection, fiscal discipline, and private sector-led growth to achieve broader economic stability.

Edun also noted that recent indicators, including rising external reserves, improved revenue performance and inflation reduction point to a positive trajectory, with reforms already laying the groundwork for sustained and inclusive growth.

Edun described Nigeria’s current economic phase as one of stabilisation and recovery following bold structural reforms initiated at the beginning of the Tinubu administration.

He said reforms such as the adoption of market-based pricing for foreign exchange and petroleum products have restored investor confidence and created a more transparent environment for economic activity.

The minister stated that those early measures, though challenging, were critical in attracting domestic and foreign investment, as they created a predictable and rules-based system that entrepreneurs, businesses, and even startups could rely on.

He noted that the economy has now entered a third phase, which focuses on deepening investments to drive productivity in sectors such as agriculture, manufacturing, and services, with the ultimate goal of reducing multidimensional poverty.

Citing a recent visit by Shell executives, Edun revealed that the oil giant plans to invest $5.5 billion in Nigeria this year, countering perceptions that major players are pulling out of the country.

According to him, the current economic environment has become more attractive and stable, encouraging further investments across key sectors.

The minister emphasised that while Nigeria’s real GDP growth is currently between 3.4 and 3.8 percent, this is still below the government’s target.

Recent data from the National Bureau of Statistics (NBS) show that inflation has begun easing, with the latest figure at 22.97 percent.

Edun said this downward trend signals that the country is moving in the right direction, commending the Central Bank of Nigeria (CBN)’s market-based forex policy for helping to eliminate the black-market premium, which previously allowed individuals to exploit exchange rate arbitrage.

“With that gap narrowed, speculative activity has reduced, and investor confidence has grown,” he added.

Nigeria’s external reserves have also improved significantly, rising from a low of about $3 billion to over $23 billion in two years.

On the fiscal side, Edun disclosed that revenues increased from N12.5 trillion in 2023 to nearly N21 trillion in 2024, driven by aggressive reforms, digital systems, and tighter control of leakages.

He said the government holds daily fiscal review meetings to ensure consistency in data from the DMO, Budget Office, and the Office of the Accountant General.

Edun explained that revenue from the federation account has grown, translating to increased allocations to states and local governments.

“Nigeria’s macroeconomic progress has not gone unnoticed. International credit rating agencies Fitch and Moody’s have upgraded the country’s ratings.