The Federal Government is optimistic about meeting its N36.35 trillion revenue target for 2025, citing ongoing economic reforms under President Bola Tinubu’s administration.
This was disclosed by the Minister of Budget and Economic Planning, Abubakar Bagudu, during a hearing at the National Assembly Joint Committees on Finance, where the 2025 Appropriation Bill was discussed, according to a press statement on Monday.
In his statement, Bagudu emphasized the positive effects of the administration’s recent reforms, especially the removal of fuel and foreign exchange subsidies.
He noted that these changes have already begun to enhance revenue generation across all levels of government, with noticeable improvements first seen in the Federation Account as early as October 2023.
The Minister expressed confidence that the positive revenue trend will continue, driven by savings from the subsidy removals.
He also highlighted that the 2024 budget, being the administration’s first full-year budget, provided valuable lessons that have shaped the assumptions for the 2025 budget.
“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 President Tinubu has directed all revenue-generating Ministries, Departments, and Agencies (MDAs), along with Government-Owned Enterprises, to ramp up efforts in increasing national revenue.
In addition to the subsidy removals, he also highlighted the government’s strategy to boost oil production at a lower cost, which is expected to further augment the nation’s treasury.
The government aims to achieve a production level of 2.06 million barrels per day, based on an oil price of $75 per barrel and an exchange rate of N1,500 to the dollar.
These projections 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, Minister Bagudu remains confident that the administration will generate enough revenue to cover the N49.74 trillion expenditure proposed for 2025.
He emphasized that the lessons learned from implementing the 2024 budget, the first full-year budget under the current administration, will play a crucial role in helping the government achieve its 2025 financial targets.
The Minister outlined key lessons from the 2024 budget, emphasizing the vital role of fuel subsidy removal in enhancing both revenue generation and expenditure efficiency.
He also pointed to the deregulation of the foreign exchange market, which has directly impacted government revenue and spending, as a significant factor contributing to the optimistic projections for 2025.
