Nigeria recorded a fiscal deficit of about N5.7 trillion in the first six months of 2025, reflecting continued strain on public finances amid revenue shortfalls and elevated government spending.
Data from the Q1 and Q2 2025 Budget Implementation Reports released by the Budget Office of the Federation show that while the deficits were lower than budgeted projections, they remained significantly higher than levels recorded in the same period of 2024.
The figures highlight the Federal Government’s growing reliance on domestic borrowing and external concessional loans to bridge the widening gap between revenue and expenditure.
According to the reports, the Federal Government recorded a fiscal deficit of N3.04 trillion in the first quarter (Q1) of 2025.
Although this was N481.81 billion, or 13.67 per cent, below the projected quarterly deficit of N3.53 trillion, it represented a sharp increase from the N1.47 trillion deficit posted in Q1 2024.
The Q1 deficit was financed largely through domestic borrowing of N3.30 trillion, complemented by N57.16 billion from privatisation proceeds and N70.11 billion from multilateral and bilateral project-tied loans.
In the second quarter (Q2) of 2025, the fiscal deficit stood at N2.66 trillion, N865.14 billion (24.52 per cent) lower than the projected N3.53 trillion for the quarter.
This outturn was also an improvement over the N3.17 trillion deficit recorded in Q2 2024.
Despite remaining below projections, the deficits point to persistent structural challenges in Nigeria’s public finances, particularly weak revenue performance relative to expenditure obligations.
The Budget Office noted that the Q2 deficit translated to a deficit-to-GDP ratio of 2.64 per cent, which is within the 3 per cent threshold set for Nigeria and under the ECOWAS convergence criteria.
Financing of the Q2 deficit again leaned heavily on borrowing, with domestic sources accounting for N2.80 trillion.
However, external funding played a bigger role, as multilateral and bilateral project-tied loans rose sharply to N1.60 trillion, alongside N7.76 billion from privatisation proceeds.
This increased reliance on concessional external loans reflects ongoing efforts by the government to manage financing costs while funding capital projects and meeting recurrent obligations.
Taken together, the Q1 and Q2 figures bring Nigeria’s total fiscal deficit for the first half of 2025 to about N5.7 trillion, demonstrating the continued imbalance between government revenues and expenditures.
While deficits remain below projections, heavy domestic borrowing raises concerns over debt sustainability, rising interest costs, and potential crowding out of private sector credit if revenue mobilisation does not improve in the second half of the year.
Earlier, Naijaonpoint reported that Nigeria’s fiscal deficit jumped to N13.51 trillion in 2024, exceeding targets and breaching the FRA 2007 deficit-to-GDP limit.
Earlier, Naijaonpoint reported that Nigeria’s fiscal deficit jumped to N13.51 trillion in 2024, exceeding targets and breaching the FRA 2007 deficit-to-GDP limit.
The Budget Office said the quarterly deficit was projected at N2.29 trillion, excluding N262.98 billion in GOE and multilateral/bilateral project-tied loans.