Government Debt Servicing Exceeds Budgetary Allocations
The Federal Government’s expenditure on debt servicing reached N12.52 trillion in the first nine months of 2025, exceeding the N10.74 trillion set aside in the national budget by N1.78 trillion. This alarming figure underscores significant fiscal imbalances within the nation’s financial framework.
According to the Budget Execution Report for the third quarter of 2025, published by the Federation’s Budget Office, revenue retention during this period totaled N16.48 trillion. This amount is a staggering 42.2% short of the budget’s pro-rated estimate of N28.8 trillion, revealing a shortfall of N12.3 trillion.
Revenue Shortfalls Widen Across Multiple Sectors
An analysis of financial data from Business Day indicates that N6.23 trillion was allocated for domestic debt servicing from January to September, surpassing the planned budget of N5.39 trillion. External debt servicing also exceeded expectations, with N6.3 trillion spent against the projected N5.06 trillion. Collectively, these expenditures accounted for a daunting 67.2% of the Federal Government’s retained revenue of N18.63 trillion over the nine-month period.
Total government revenue saw a decline of 39%, reaching N18.6 trillion, which is N12.6 trillion less than the anticipated N30.6 trillion for the same timeframe. The revised budget framework outlines an annual allocation of N40.89 trillion for the federal budget, with the expectation of quarterly contributions of N10.22 trillion. However, actual revenue generation has consistently fallen short, bringing in N4.95 trillion in the first quarter, N5.97 trillion in the second, and N7.7 trillion in the third quarter.
Non-Oil Revenue Sources Disappoint
Further insights reveal that total non-oil revenue stood at N17.38 trillion, which is N789.55 billion below the budget estimate of N18.17 trillion. Notably, corporate income tax contributed N7.53 trillion, value-added tax accounted for N6.41 trillion, and electronic money transfer tax generated N310.42 billion.
Positively, the solid minerals and mining sector reported revenues of NOK 54.79 billion, surpassing its third-quarter budget estimate of N27.66 billion by 87.21%. Conversely, foreign exchange gains, initially projected to be negligible, yielded N84.7 billion during the same three quarters.
Poor Performance in Oil Sector Profits
Many key revenue streams fell significantly short of their targets. The Nigeria Police Trust Fund levy generated N470 billion, well below the expected N3.75 billion, while Customs and Excise collections totaled N2.83 trillion against a budgeted N4.65 trillion. Similarly, the Special Federal Accounts Levy raised only N209.43 billion compared to the anticipated N718.82 billion.
Profits from the oil sector also declined sharply. Revenue from crude oil and gas sales was N1.33 trillion, while oil profits and gas taxes totaled N6.14 trillion, royalties amounted to N5.54 trillion, and ancillary oil revenues reached N475.9 billion. All these figures fell short of the pro-rata forecasts, which were N3.53 trillion, N23.54 trillion, N0.3 trillion, and N887.65 billion, respectively.
In a positive development, the Federal Government generated N32.72 billion from concessional rentals and N39.38 billion from pipeline charges, both of which exceeded third-quarter targets of N15.07 billion and N15.02 billion, respectively.
