The Federal Government of Nigeria recorded a fiscal deficit of ₦2.66 trillion in the second quarter of 2025, which remained within the ECOWAS convergence limit of 3% of GDP, according to the Budget Office of the Federation (BOF). The 2025 Second Quarter Budget Implementation Report (BIR) indicated that although revenue collection fell short of the projected budget figures, it showed improvement compared to the same period in 2024.

Revenue and Expenditure Details

The report revealed that gross oil revenue for Q2 2025 stood at ₦4.77 trillion, below the ₦12.76 trillion quarterly target, while non-oil revenue reached ₦4.46 trillion, slightly surpassing expectations. After deductions, the total net distributable revenue for all three tiers of government amounted to ₦9.85 trillion, reflecting a shortfall of ₦7.01 trillion.

Total government spending in the quarter was ₦8.63 trillion, representing a 37.19% decrease from the budgeted amount, but still slightly higher than Q2 2024 spending.

Fiscal Deficit and Financing

The fiscal deficit of ₦2.66 trillion was ₦865.14 billion (24.52%) lower than the projected ₦3.53 trillion for the quarter. The deficit translated into a deficit-to-GDP ratio of 2.64%, well below the 3% threshold stipulated by ECOWAS. The Q2 2025 fiscal deficit was also lower than the ₦3.17 trillion deficit recorded in the second quarter of 2024.

To finance this deficit, the government resorted to domestic borrowing of ₦2.80 trillion, privatization proceeds of ₦7.76 billion, and multi-lateral/bi-lateral project-tied loans of ₦1.60 trillion.

Debt Service and Economic Growth

The debt service for the quarter reached ₦4.44 trillion, with external debt payments amounting to ₦1.69 trillion — 60.05% above the forecasted figure. However, domestic debt servicing was ₦90.71 billion below the target.

Nigeria’s Gross Domestic Product (GDP) grew by 4.23% in Q2 2025, indicating a steady economic recovery, supported by government stimulus packages.

Oil Sector Challenges

The report also highlighted that crude oil remains Nigeria’s primary export, accounting for ₦11.96 trillion, or 52.60% of total exports. However, challenges such as theft, vandalism, and underinvestment continue to affect the sector, with average daily oil production recorded at 1.68 million barrels.

Expenditure Controls and Future Outlook

Efforts to control recurrent expenditure included imposing an embargo on unapproved recruitment and ensuring strict budget oversight. Non-debt recurrent expenditure totaled ₦2.72 trillion, while statutory transfers stood at ₦499.71 billion.

The report emphasized the need for improved fiscal management, revenue mobilization, and accountability in government operations to sustain growth. Key priorities include enhancing power supply, improving security, and protecting vulnerable citizens and businesses.

Minister’s Statement

Senator Abubakar Atiku Bagudu, the Minister of Budget and Economic Planning, noted that the report demonstrates the Federal Government’s commitment to transparency, accountability, and sound public financial management. He acknowledged the fiscal pressures but emphasized that the government continues to prioritize capital investment. He also stressed the importance of strengthening domestic revenue mobilization and ensuring fiscal sustainability.

Director-General’s Comments

Tanimu Yakubu, the Director-General of the Budget Office of the Federation, provided an outlook that focuses on global challenges. He highlighted that commodity price volatility, climate shocks, and monetary tightening in advanced economies would continue to challenge fiscal resilience. However, he assured that the budget office would maintain its role in rigorous monitoring, inter-agency data integration, and transparent public reporting.