Nigeria recorded a fiscal deficit of ₦2.66 trillion in the second quarter of 2025, remaining within the ECOWAS convergence limit of three percent of Gross Domestic Product, according to the Budget Office of the Federation.

This disclosure is contained in the 2025 Second Quarter Budget Implementation Report released by the Budget Office of the Federation, which noted that although revenue performance fell below budget projections, it improved compared to the same period in 2024.

The report stated that gross oil revenue for the quarter stood at ₦4.77 trillion, significantly below the quarterly target of ₦12.76 trillion.

It added that non-oil revenue amounted to ₦4.46 trillion, marginally exceeding the estimated figure for the period.

According to the report, total net distributable revenue available to the three tiers of government after deductions was ₦9.85 trillion, representing a shortfall of ₦7.01 trillion from projections.

The Budget Implementation Report disclosed that total government expenditure in the second quarter of 2025 stood at ₦8.63 trillion, a figure that was 37.19 percent lower than the approved quarterly budget but slightly higher than spending recorded in the second quarter of 2024.

“The revenue and expenditure outturn of the Federal Government resulted in a fiscal deficit of ₦2.66 trillion in the second quarter of 2025. This was ₦865.14 billion (24.52 percent) below the projected quarterly fiscal deficit of ₦3.53 trillion. This translates to a deficit to GDP ratio of 2.64 percent in the quarter under review which is within the 3 percent threshold for the country and the ECOWAS convergence criteria. The Q2 2025 fiscal deficit was also lower than the ₦3.17 trillion deficit recorded in the second quarter of 2024,” the document stated.

The report explained that the fiscal deficit was financed through domestic borrowing totalling ₦2.80 trillion, privatisation proceeds of ₦7.76 billion, and multilateral and bilateral project-tied loans amounting to ₦1.60 trillion.

It further revealed that debt service obligations rose to ₦4.44 trillion during the quarter.

The report indicated that external debt service stood at ₦1.69 trillion, which was 60.05 percent above the projected figure for the period.

It also showed that domestic debt servicing was ₦90.71 billion, representing a 5.05 percent reduction below the projected amount for the quarter.

“External debt service was ₦1.69 trillion in the quarter, ₦1.01 trillion or 60.05 percent above the prorate projected figure for the period. Domestic debt servicing was however ₦90.71 billion or 5.05 percent below the projection for the quarter,” the report added.

The Budget Implementation Report noted that Nigeria’s Gross Domestic Product grew by 4.23 percent in the second quarter of 2025, indicating gradual economic stability supported by government stimulus measures.

It highlighted that crude oil remained the country’s leading export, contributing ₦11.96 trillion or 52.60 percent of total export earnings during the quarter.

The report disclosed that average daily crude oil production stood at 1.68 million barrels, although challenges such as oil theft, pipeline vandalism and underinvestment continued to affect the sector.

According to the report, efforts to rein in recurrent expenditure included an embargo on unapproved recruitment and stricter budgetary oversight across government agencies.

It stated that non-debt recurrent expenditure for the quarter totalled ₦2.72 trillion.

The report also showed that statutory transfers amounted to ₦499.71 billion during the period under review.

The Budget Office emphasised the need for improved fiscal management, enhanced revenue mobilisation and stronger accountability in public finance to sustain economic growth.

It further identified key priorities including improving power supply, strengthening security to protect lives and property, and safeguarding vulnerable citizens and businesses.

“Overall, the nation’s economy grew by 4.23 percent in the second quarter of 2025, a sign that represents an improvement in economic performance and a gradual economic stability. It is expected that the economy will continue to improve in subsequent quarters of 2025,” the Budget Office said.

The Minister of Budget and Economic Planning, Senator Abubakar Atiku Bagudu, said the report demonstrated the Federal Government’s commitment to transparency, accountability and sound public financial management.

He added that despite prevailing fiscal pressures, the government prioritised capital investment while intensifying efforts to strengthen domestic revenue mobilisation and ensure long-term fiscal sustainability.

Also commenting on the report, the Director General of the Budget Office of the Federation, Tanimu Yakubu, said the fiscal outlook remains shaped by global economic conditions.

He noted that commodity price volatility, climate-related shocks and monetary tightening in advanced economies would continue to test Nigeria’s fiscal resilience.

Yakubu, however, assured that the Budget Office would sustain its mandate of rigorous budget monitoring, enhanced inter-agency data integration and transparent public financial reporting.