Nigeria recorded a 62.2% shortfall in its prorated oil and gas revenue target for the first seven months of 2025, delivering a major blow to the credibility of the national budget.
This is according to data contained in the Federal Government’s 2025–2027 Medium Term Expenditure Framework (MTEF), which outlines key fiscal assumptions and performance indicators.
The shortfall reflects the dual impact of lower-than-budgeted crude oil production and weaker global oil prices, further underlining the fiscal risks associated with Nigeria’s dependence on oil revenue.
Under the 2025 federal budget, Nigeria projected N51.04 trillion in gross oil and gas revenue for the full year.
On a prorated basis, the expected inflow for January to July stood at N29.78 trillion.
These figures reinforce how far actual oil revenues have diverged from budget expectations, well before the year’s end.
The revenue gap occurred during a period of weaker global oil prices.
While the 2025 budget was benchmarked at $75 per barrel, actual market conditions in 2025 were less favourable as crude oil trade below $65.
Given the centrality of oil receipts to both federal and subnational budgets, lower prices amplified the fiscal impact of reduced production volumes, pushing the budget further off course.
The Federal Government had set a crude oil production benchmark of 2.1 million barrels per day (mbpd) in the 2025 budget. However, actual production data tells a different story.
The shortfall highlights the persistent mismatch between budget expectations and actual operational realities in Nigeria’s oil sector.
Non-oil revenue sources provided some buffer but ultimately failed to close the oil revenue gap. As of July 2025, net non-oil revenue stood at N12.14 trillion—N1.81 trillion (13%) below its prorated target.
Some non-oil revenue items performed above expectations:
However, significant underperformance in customs duties, along with a near-collapse in receipts from solid minerals and NLNG dividends, dragged down total non-oil revenue performance.
The revenue gaps highlighted in the 2025 MTEF call into question the credibility of Nigeria’s fiscal planning and underline long-standing structural vulnerabilities.
For investors and policy stakeholders, the data points to the urgency of either aligning budget expectations more closely with operational capacity or fast-tracking reforms that can meaningfully scale non-oil revenue contributions.
For investors and policy stakeholders, the data points to the urgency of either aligning budget expectations more closely with operational capacity or fast-tracking reforms that can meaningfully scale non-oil revenue contributions.
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