ABUJA, Dec 24 – Nigeria posted a N5.7 trillion ($4 billion) fiscal deficit in the first half of 2025, official budget execution data showed, reflecting sustained strain on public finances driven by weak revenue performance and elevated government spending.
Figures from the Budget Office of the Federation’s Q1 and Q2 2025 Budget Implementation Reports revealed that the first-half shortfall reflected a widening gap between government revenues and expenditures that remains significantly larger than a year earlier.
In the first quarter of 2025, the fiscal deficit stood at N3.04 trillion ($2 billion). This was N481.81 billion, or 13.67 percent, below the projected quarterly deficit of N3.53 trillion but more than double the N1.47 trillion deficit recorded in the first quarter of 2024.
Financing for the quarter was largely sourced from domestic borrowing amounting to N3.30 trillion, alongside N57.16 billion from privatization proceeds and N70.11 billion from multilateral and bilateral project-tied loans.
The second quarter recorded a fiscal deficit of N2.66 trillion, which was N865.14 billion, or 24.52 percent, lower than the projected N3.53 trillion. This also marked an improvement compared with the N3.17 trillion deficit posted in the same quarter of 2024.
The Budget Office noted that the second-quarter deficit translated to a deficit-to-GDP ratio of 2.64 percent, remaining within Nigeria’s 3 percent fiscal threshold and the ECOWAS convergence criteria.
Borrowing again accounted for the bulk of deficit financing in the second quarter, with domestic sources contributing N2.80 trillion. External funding played a larger role during the period, as multilateral and bilateral project-tied loans increased sharply to N1.60 trillion, alongside N7.76 billion from privatization proceeds.
Combined, the first and second quarter figures bring Nigeria’s total fiscal deficit for the first half of 2025 to approximately N5.7 trillion. While the deficits remain below projections, analysts warn that continued reliance on domestic borrowing could heighten debt sustainability risks, raise interest costs, and crowd out private sector credit unless revenue mobilization improves in the second half of the year.
