Oil Revenue Shortfall Hits N6.69tn
Nigeria’s oil revenue fell N6.69 trillion short of target in the third quarter of 2025, deepening fiscal pressure as the Federal Government released only N16.08 billion for capital projects, the Budget Office of the Federation has said.
According to the Reviewed 2025 Third Quarter Macroeconomic and Financial Analysis released by the BOF, net revenue available for distribution was N10.29 trillion. This represented a shortfall of N6.57 trillion, or 38.98 per cent, compared to the quarterly projection of N16.86 trillion.
The oil sector accounted for most of the gap. Gross oil revenue of N4.18 trillion was 61.53 per cent, or N6.69 trillion, below the N10.88 trillion prorated quarterly projection in the 2025 budget.
The figure was, however, N180 billion, or 4.5 per cent, above the N4.00 trillion generated in Q3 2024.
By contrast, non-oil revenue performed better. Gross accruals of N6.52 trillion were N468.58 billion, or 7.74 per cent, above the quarterly estimate of N6.05 trillion.
The Budget Office attributed the stronger non-oil performance to improvements in VAT, EMTL, independent revenue and Education Tax collections.
Oil production averaged 1.64 million barrels per day in the quarter, well below the 2.12mbpd benchmark in the budget. The production shortfall further weakened oil revenue.
The report showed the Federal Government generated aggregate revenue of N7.70 trillion between July and September, representing 75.16 per cent of target. Of this, oil revenue was N2.45 trillion, or 31.87 per cent, while non-oil revenue was N5.25 trillion, or 68.18 per cent.
Despite an N16.76 trillion capital budget for 2025, only N16.08 billion was released to MDAs and cash-backed for capital projects in Q3. The BOF blamed cash-management bottlenecks and delays in bottom-up cash planning.
The government spent N8.03 trillion in the quarter, 41.57 per cent below budget. Debt service gulped N3.41 trillion, with domestic debt service at N1.80 trillion and external at N1.69 trillion.
The fiscal deficit for Q3 stood at N2.18 trillion, above the N1.86 trillion projection. For the first nine months, the deficit reached N9.53 trillion, financed largely through N7.07 trillion domestic borrowing and N4.81 trillion project-tied loans.
The report also noted that credit to the private sector declined by N3.64 trillion to N72.50 trillion, while net credit to government rose by N430 billion.
Despite the fiscal strain, GDP grew by 3.98 per cent year-on-year and headline inflation eased to 18.02 per cent in September.
The BOF recommended more realistic oil production assumptions, stronger tax compliance, automation of customs, and value-for-money audits to improve revenue and cut debt-service pressure.
SOURCE: The Guardian