The Federal Government has expressed confidence in achieving its N36.35 trillion revenue target for 2025 as economic reforms continue to take shape under President Bola Tinubu’s administration.
According to a press statement on Monday, the Minister of Budget and Economic Planning, Abubakar Bagudu, made this assertion during a hearing at the National Assembly Joint Committees on Finance, where he discussed the 2025 Appropriation Bill.
Speaking in Abuja, Bagudu highlighted the positive impact of the administration’s recent reforms, particularly the removal of fuel and foreign exchange subsidies, which he said have already started to yield results.
According to Bagudu, these changes have begun to boost the revenue of all three tiers of government, with tangible benefits first visible in the Federation Account as early as October 2023.
The minister noted that the government expects this upward revenue trajectory to continue, driven by the savings from subsidy removals.
He was quoted in the story as saying, “The 2024 budget is this administration’s first full-year budget, and lessons learned from 2024 have formed the basis of the assumptions in 2025.
“The principal among those assumptions and lessons was the removal of the fuel subsidy and its effect on revenue and expenditure, the removal or deregulation of the foreign exchange market and its impact on both government revenue and spending, and other price-distorting issues, such as electricity, which has not been fully dealt with
“All the major, bold, and courageous steps taken with the support of the National Assembly are intended to generate more revenues for the three tiers of government, correct distortions in the economy, and improve expenditure efficiency so that we can ensure that the revenue generated goes a long way.”
He revealed that Tinubu has instructed all revenue-generating Ministries, Departments, and Agencies, as well as Government-Owned Enterprises, to intensify their efforts in bringing more funds into the national coffers.
In addition to the subsidy removals, Bagudu also pointed to the government’s efforts to increase oil production at a lower cost, which he said would further swell the nation’s treasury.
The government aims to achieve a production level of 2.06 million barrels per day, assuming a price of $75 per barrel, with an exchange rate of N1,500 to the dollar.
These assumptions are part of the 2025 Medium-Term Expenditure Framework and Fiscal Strategy Paper, which has already been approved by the National Assembly.
Despite a projected deficit of N13.08 trillion, Bagudu remains optimistic that the administration will generate sufficient revenue to cover the N49.74 trillion expenditure proposed for 2025.
He pointed out that the lessons learned from implementing the 2024 budget, which was the first full-year budget under the current administration, will help the government meet its 2025 target.
Key lessons from 2024, according to Bagudu, include the crucial role of fuel subsidy removal in improving both revenue and expenditure efficiency.
The deregulation of the foreign exchange market, which has had a direct impact on government revenue and spending, is also a major factor contributing to the optimistic projections for 2025.
Also, the government has made significant strides in addressing other price distortions, such as those in the electricity sector.
Bagudu assured lawmakers that although 2024 was marked by fluctuating revenue profiles, the government has already seen the full benefits of the fuel subsidy removal by October 2023.
The reforms, combined with the government’s commitment to ramping up oil production, have positioned Nigeria for a more stable revenue stream moving forward.
The minister expressed confidence that with the continued support of the National Assembly, the necessary steps to ramp up the performance of MDAs and GOEs will yield positive results.
