By Joke Kujenya
FEDERAL REVENUES for 2025 are collapsing to N10.7tn, far below the N40.8tn originally projected, Finance Minister Wale Edun told lawmakers this week, exposing a gap of nearly N30tn.
Edun said weak oil and gas receipts, shortfalls in petroleum profit tax and company income tax, and gaps in non-oil revenue are largely responsible.
“The current trajectory shows that revenues are far below expectations, and this has real consequences for households and the economy,” Edun said during an interactive session with the House Committees on Finance and National Planning.
Economists warn that the shortfall could drive higher taxes, increased borrowing, and delays to capital projects and social infrastructure.
Former Zenith Bank Chief Economist Marcel Okeke also criticised the government for earlier claims that revenue targets had been met.
“President Tinubu, in September, said the targets were already met, yet in December, the Finance Minister confirms the shortfall,” Okeke said.
He added that insecurity in parts of the country has hindered revenue collection.
The funding gap is forcing the government to consider alternative sources, he also noted.
Economist Paul Alaje said domestic and foreign borrowing may rise sharply, affecting debt sustainability and investor confidence.
“A N30tn revenue gap is enormous. Options include borrowing abroad, which pressures the naira, or domestic borrowing, which risks crowding out private investment,” he noted.
Despite President Tinubu’s earlier assurances that domestic borrowing had ended, the Senate approved N1.15tn in local borrowing in November to cover the 2025 deficit.
Former Crescent University Vice Chancellor Sheriffdeen Tella questioned the deficit plans, citing inefficiencies in tax collection and pre-budget borrowing.
“The N10tn revenue figure seems intended to justify more borrowing. Loans were requested before implementing the budget, which is not how fiscal planning should work,” he said.
Economist Illias Aliyu warned that ordinary Nigerians will ultimately feel the impact of persistent borrowing and rising debt-service costs, particularly through delayed social infrastructure projects.
“About 70 per cent of capital projects have been rolled over into 2026. This government lacks the fiscal discipline expected, and ordinary Nigerians will bear the burden,” he said.
Government expenditure under President Tinubu has surged from N6tn to N34tn over the past two years, while debt servicing rose from N7tn to N12tn.
Total public debt reached N152tn as of June 2025. Plans to borrow N17.89tn in 2026, a 72 per cent increase on 2025, are intended to cover widening deficits, raising concerns about debt sustainability and higher financing costs.
A release noted that the administration has sought to boost revenues through the Nigeria Tax Act, 2025, consolidating multiple tax laws into four acts to broaden the tax base.
In particular, the Federal Inland Revenue Service (FIRS) also signed a memorandum of understanding with France’s Direction Générale des Finances Publiques to improve tax administration, though it does not grant France access to Nigerian taxpayers’ data.
