Nigeria targets record fiscal deficit of N13 trillion in 2025, blames new minimum wage, pensions others 

This projected deficit represents approximately 38% of the Federal Government’s revenues and 3.87% of the estimated GDP.

The largest fiscal deficit based on the MTEF was N11.6 trillion in 2023 while the government has estimated a fiscal deficit of N10.2 trillion for the period 2022-2026 MTEF.

The Medium-Term Expenditure Framework (MTEF) attributes this increase to factors such as the new minimum wage, pension obligations, consequential adjustments, and rising debt service costs.

Revenue Targets: N34.8 trillion 

Expenditure Goals: N47.9 trillion 

This leaves a substantial fiscal gap of N13.08 trillion, to be financed through borrowing and other deficit-financing measures.

Nigeria has been running fiscal deficits for years as government revenues continue to lag expenditure.

For 2025, the federal government is projecting a budget deficit of N13.08 trillion representing 3.87% of GDP.

This represents about 38% of total FGN revenues and 3.87% of the estimated GDP. The deficit is higher than the N9.18 trillion estimated for 2024.

The government also stated that it “aims to lower the deficit levels” to the threshold stipulated in the FRA 2025 within the medium term.

Nigeria’s government is banking on tax reforms, automation, and improved compliance to boost revenues.

In terms of exchange rates, Fiscal deficits can significantly influence exchange rates, primarily through their impact on government borrowing.