FG Records ₦2.66trn Fiscal Deficit in Q2 2025, Remains Within ECOWAS Limit

Nigeria posted a fiscal deficit of ₦2.66 trillion in the second quarter of 2025, staying within the ECOWAS convergence benchmark of three percent of Gross Domestic Product (GDP), according to the Budget Office of the Federation (BOF).

The figure is contained in the BOF’s 2025 Second Quarter Budget Implementation Report (BIR), which noted that although revenue performance fell below projections, it showed improvement when compared with the same period in 2024.

The report revealed that gross oil revenue amounted to ₦4.77 trillion, significantly lower than the quarterly target of ₦12.76 trillion, while non-oil revenue stood at ₦4.46 trillion, marginally exceeding estimates. Total net distributable revenue available to the three tiers of government after deductions was ₦9.85 trillion, reflecting a shortfall of ₦7.01 trillion.

Government expenditure in the quarter was put at ₦8.63 trillion, representing a 37.19 percent decline from the budgeted quarterly figure, though slightly higher than spending recorded in Q2 2024.

Explaining the fiscal outcome, the report stated:
“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 deficit was financed through domestic borrowing of ₦2.80 trillion, privatisation proceeds of ₦7.76 billion, and multilateral and bilateral project-tied loans amounting to ₦1.60 trillion.

The BIR also showed that debt servicing rose to ₦4.44 trillion during the quarter. External debt service stood at ₦1.69 trillion, exceeding projections by 60.05 percent, while domestic debt servicing was ₦90.71 billion or 5.05 percent below target.
“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.

On economic performance, the BOF said GDP grew by 4.23 percent in Q2 2025, signalling gradual economic stability supported by government stimulus measures. Crude oil remained the country’s major export, accounting for ₦11.96 trillion or 52.60 percent of total exports, with average daily production at 1.68 million barrels, despite ongoing challenges of oil theft, vandalism and underinvestment.

The report further noted that non-debt recurrent expenditure totalled ₦2.72 trillion, while statutory transfers amounted to ₦499.71 billion. Measures to curb recurrent spending included an embargo on unapproved recruitment and tighter budget oversight.

Emphasising the broader outlook, the BOF stated:
“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.”

Minister of Budget and Economic Planning, Senator Abubakar Atiku Bagudu, said the report underscores the Federal Government’s commitment to transparency, accountability and sound public financial management, adding that capital investment remains a priority despite fiscal pressures.

Similarly, the Director-General of the Budget Office, Tanimu Yakubu, noted that global factors such as commodity price volatility, climate shocks and monetary tightening in advanced economies would continue to test fiscal resilience, but assured that the office would maintain rigorous monitoring, data integration and transparent public reporting.

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