Strong Revenue Performance Signals Recovery
Nigeria’s revenue-earning drive received a significant boost in the first half of 2025, with five key government agencies generating a combined total of N21.22 trillion. The inflow reflects an intensified effort by the Federal Government to mobilise income, including aggressive tax collection strategies, stricter enforcement measures, and the expansion of operational reach to capture both taxable and non-taxable revenue streams.
Analysts note that these figures signal a gradual recovery in the economy, with higher collections from businesses and improved oil revenue contributing to the boost. The Federal Inland Revenue Service (FIRS) emerged as the top performer, bringing in N13.76 trillion from January to June, followed by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) with N5.21 trillion from oil royalties, and the Nigeria Customs Service (NCS) contributing N2.02 trillion from tariffs and import duties. Smaller contributions came from the Ministry of Mines and Steel Development (N32.39 billion) and the Nigerian National Petroleum Company Limited (NNPC) with N197.8 billion in commercial operations, although NNPC remitted N6.96 trillion in statutory payments to FAAC during the same period.
Revenue Distribution and Fiscal Targets
The half-year earnings represent about 42.23% of the N50.2 trillion revenue targets set for FIRS, NUPRC, and NCS collectively, and roughly 58% of the government’s N36.35 trillion 2025 revenue projection. This puts the government on track to meet or even surpass its full-year fiscal targets if the current momentum continues.
The funds were allocated among the three tiers of government—federal, state, and local—in accordance with Nigeria’s revenue-sharing formula, intended to support critical infrastructure projects and public services nationwide. The strong inflow is credited to improved tax administration, enhanced customs operations, and a favourable oil benchmark of $75 per barrel with a daily production target of 2.06 million barrels.
Borrowing Continues Despite Revenue Gains
Despite the robust collections, the government has continued to pursue foreign loans and grants to finance budget deficits and fund large-scale infrastructure projects. Data from the Debt Management Office shows Nigeria’s total public debt had reached N149.39 trillion as of March 31, 2025, a 22.8% increase from the previous year.
A significant portion of Nigeria’s external debt is owed to the World Bank Group, which now accounts for $18.23 billion, representing nearly 40% of the country’s total external debt of $45.98 billion. Recent borrowing plans approved by the legislature could add N38.24 trillion to the debt stock, raising concerns among economists about debt sustainability and fiscal pressures.
Experts Weigh in on Revenue and Borrowing
Economists offer nuanced perspectives on the current fiscal trajectory. Aliyu Ilias, CEO of CSA Advisory, expressed concern over rising debt despite strong domestic revenue performance. He argued that with agencies like FIRS and NCS exceeding targets, the government should theoretically reduce reliance on borrowing.
Conversely, economist Adewale Abimbola emphasized that borrowing from multilateral institutions like the World Bank is largely concessional, with lower interest rates and longer repayment periods. According to him, the key factor is the effective deployment of these funds into projects capable of generating sustainable growth and improving public services.
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, praised the strong revenue performance, noting that it reflects both improved economic activity and the effectiveness of reforms within key government agencies. “If this momentum is maintained, agencies are likely to surpass their full-year targets,” he said, highlighting that the NNPC’s increased remittances were particularly encouraging given historical shortfalls.
Development Projects on the Horizon
Despite debt concerns, Nigeria has secured approximately $1.08 billion in loans in 2025 for projects aimed at education, nutrition, livelihood support, and health system strengthening. Additional funding from the World Bank, totaling around $300 million, is set to support solutions for internally displaced persons, digital infrastructure expansion, and sustainable agricultural development.
While such initiatives could catalyse long-term growth, economists caution that borrowing without complementary revenue growth and prudent expenditure management could deepen fiscal pressures and crowd out critical public investment.
Conclusion
The first half of 2025 has showcased Nigeria’s capacity for robust revenue mobilisation, signalling a recovering economy and successful implementation of fiscal reforms. However, the simultaneous increase in borrowing highlights the delicate balance the government faces between funding urgent infrastructure needs and maintaining debt sustainability. Observers suggest that sustaining revenue momentum and strategically deploying borrowed funds will be key to ensuring that economic gains translate into long-term growth and improved public services.