Record Revenues, Persistent Fiscal Challenges
Since May 2023, the administration of President Bola Ahmed Tinubu has implemented sweeping economic reforms that have led to a significant increase in government revenues. These reforms include the removal of fuel subsidies and an increase in non-oil revenue, with the federal government now generating more money through various borrowings amounting to trillions of naira.
Despite these gains, critical financial obligations remain unmet. The 2024 capital expenditure was extended by one full year due to low performance; the implementation of the capital component of the 2025 budget has been suspended, leaving ministries, departments, and agencies in limbo. Contractors are owed about N2trn for projects already executed, while civil servants endure unpaid promotion arrears and staggered payment of the 35% wage award introduced to cushion the impact of inflation-triggered high cost of living.
Economic analysts have blamed this fiscal conundrum on ineffective utilization of revenue, lack of transparency in public spending, and high cost of governance. Efforts to get reaction from the Presidency on the matter were not successful as key advisors could not be reached on phone.
Higher Revenues, More Fiscal Crises
The federal government has saved substantial amounts since the withdrawal of the fuel subsidy, which used to cost about N380bn monthly. In the first quarter of 2025 alone, the government revenue from petroleum savings increased by over 500 per cent from N154bn to N836bn and the windfall is projected to exceed N11trn between 2023 and 2025.
The growth in oil earnings has fattened the Federation Account, with the federal, state, and local governments’ allocations almost double the amount they got before subsidy removal. The Chairman, Federal Inland Revenue Service (FIRS), Dr Zacch Adedeji, recently told State House correspondents that federal revenue had risen astronomically within two years, hitting N3.64trn in September 2025 alone from N711bn recorded in May 2023.
Revenue Growth Across Sectors
In May, the Nigeria Customs Service said it realized N1.3trn in the first quarter of 2025, more than 100% of the N600bn it recorded during the same time in 2023. By the first half of the year, the Service had collected N3.68trn, outpacing its target by N390bn. In September, the presidency disclosed that Nigeria generated N20.6trn in revenue between January and August 2025, up from N14.6trn recorded in the same period the previous year.
At the 10th edition of the Nigeria Mining Week 2025 held in Abuja recently, the President, represented by the Secretary to the Government of the Federation, Senator George Akume, revealed that revenue from the mining sector rebounded by over 600%, swinging from N6bn recorded in 2023 to N38bn in 2024. The sector is also said to have attracted over $800 million in foreign investment within this period.
Revenue from Blue Economy and External Reserves
Revenue from the blue economy has equally witnessed significant growth. In 2023, agencies under the Ministry of Marine and Blue Economy generated about N700.79bn, but by the end of 2024, the figure nearly doubled to N1.3trn. It is also noteworthy that external reserves have seen an upswing from $35bn in 2023 to $43.17bn in October 2025 and are projected to rise steadily, bolstered by higher oil export earnings, increased diaspora remittances, and a favorable trade surplus.
Protests and Unpaid Contracts
In spite of the revenue increase, the government has fallen short in meeting some of its key financial commitments. For two consecutive days during the week, local contractors under the aegis of the All Indigenous Contractors Association of Nigeria (AICAN) blocked the main entrance to the National Assembly, forcing lawmakers, staff, and visitors to seek alternate routes to access the premises.
The National President of AICAN, Jackson Ifeanyi Nwosu, said the federal government had failed to pay contractors for capital projects executed since 2024, leaving many of them bankrupt. ‘We didn’t just start this protest yesterday (Tuesday). We started months ago. This government owes us and they promised to pay. Since then, it’s been promises and failure, promises and failure. We can’t continue like this. We can’t feed our families anymore,’ Nwosu stated.
Financial Challenges in Various Ministries
Similarly, constituency projects for federal lawmakers have been slashed by half to N500m. At a town hall meeting with his constituents, Yusuf Gagdi, a member of the House of Representatives representing Pankshin/Kanke/Kanam Federal Constituency of Plateau State, expressed concern over the government’s failure to release funds for capital projects in the 2025 fiscal year.
A fortnight ago, civil servants under the platform of the Federal Workers Forum (FWF) appealed to the government to pay their three-month outstanding wage award. The group, in a statement signed by its National Coordinator, Comrade Andrew Emelieze, complained that the payment had been inconsistent and appealed to the government to clear the backlog of promotion arrears.
Delayed Ambassadors and Funding Issues
In an interview recently, the Foreign Minister, Yusuf Maitama Tuggar, alluded to funding as part of the reasons for the delay in the appointment of ambassadors. Other reasons he cited were the need for the President to focus on economic reforms, currency fluctuation, and currency conversion challenges faced by missions abroad.
‘MDAs partially grounded over non-release of funds’
Workers in federal Ministries, Departments and Agencies (MDAs) have decried the non-release of capital expenditure in the year 2025. They also alleged that the release of recurrent expenditure has been epileptic, noting that since January 2025, not much has been achieved in terms of fulfilling their mandates.
Budget Implementation and Future Plans
Experts are asking questions as to where all the monies borrowed have been channelled to, considering that while many ministries have not carried out substantial projects, hundreds of local contractors, who claimed the federal government owed them over two trillion naira, have been protesting in the last few days.
But the Budget Office of the Federation, led by Dr. Tanimu Yakubu, had in August stated that the federal government was using 2025 revenue to fund 2024 budget following the extension of the 2024 budget circle by the National Assembly to December 2025.
Borrowing Spree, Less Impact
According to the current data released by the Debt Management Office, Nigeria’s total public debt stock rose to N152.40trn as of June 30, 2025, from the N87.38trn Tinubu inherited from his predecessor, the late President Muhammadu Buhari, who oversaw a fuel subsidy regime.
The federal government had earlier this year announced that it was expecting fresh loans from the World Bank, totalling $2.2bn. In March 2025, the World Bank approved a $500m loan for Nigeria to support its Community Action for Resilience and Economic Stimulus (CARES) Program aimed at providing critical relief to vulnerable households and small businesses grappling with inflation and its attendant economic hardship.
How Are Nigerians Faring?
Meanwhile, there are widespread concerns that the revenue increase and multi-billion-dollar borrowings have had little impact on the lives of average Nigerians who contend daily with high unemployment, a cost-of-living crisis, and worsening poverty.
A 2024 World Bank report revealed that 129 million Nigerians, or 56%, live below the poverty line, up from 83 million, or 40%, in 2018. A 2025 survey by Afrobarometer, a pan-African research network that conducts public attitude surveys on democracy, governance, economy, and society, found that the majority of Nigerians believed the economy was worse off after the subsidy removal and called for its reinstatement.
Speaking to Channels TV in August, ace Nigerian author Chimamanda Ngozi Adichie worried that things had gone south in the country to the extent that the middle class, who should be able to live a fairly comfortable life, had become beggars.
