FG refocusing spending as budget assumptions falter – Edun

…says spending focus going to areas with direct citizen impact

Wale Edun, the minister of finance and coordinating minister of the economy, said on Thursday that government is now prioritising spending in response to falling short of key budget assumptions, particularly in oil production and price benchmarks.

At a press briefing in Abuja, Edun provided what he described as a “clear and candid” overview of Nigeria’s economic performance, outlining both progress made and the hurdles still ahead. His remarks paint a picture of an administration balancing on the edge of macroeconomic stability while grappling with revenue underperformance and rising domestic pressures.

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“The task ahead,” Edun said, “is to move from economic stability to better livelihoods for Nigerians—more jobs, higher incomes, and better public services.”

Despite modest signs of growth and improving macro indicators, the minister was frank about the strain facing the nation’s finances. Nigeria’s average oil production in the first half of 2025 was 1.67 million barrels per day—well below the budget assumption of 2.06 million. Compounding the gap, the average crude price during the period hovered around $67 per barrel, significantly under the $75 benchmark used for the 2025 budget.

“The shortfall to those estimates is glaring for all to see,” Edun acknowledged. “That means we have a task of prioritisation to ensure that critical payments are made and key areas are still funded.”

The government, he explained, is now funnelling limited resources towards sectors that have the most direct impact on citizens and the greatest potential to support the administration’s economic growth ambitions.

GDP growth stood at 3.13% in the first quarter of 2025, continuing an upward trend from 2.4% in the same period last year. Growth was driven primarily by trade, construction, and communications, with new momentum in rail transport, electricity, and oil refining. Nonetheless, Edun noted that agriculture—the country’s largest employer—remains sluggish, with just 0.7% growth in Q1.
Inflation, while still elevated at 22.22% as of June, is beginning to moderate. The monetary policy rate remains at 27.5%, a necessary but painful measure by the central bank to anchor inflation expectations. “Our role,” Edun said, “is to be supportive and collaborative in that fight against inflation.”

A major focus of the briefing was the administration’s renewed commitment to fiscal discipline. Edun disclosed that since the current administration took office, there have been no unauthorised debits to the Ways and Means account—a major shift from prior practices that had eroded fiscal credibility.

“We have ended the unauthorised and above-limits funding by Ways and Means, which was a natural default,” he said. “There have been no debits to Ways and Means since early in this administration.”

Government revenues rose 37.4% year-on-year in the first half of 2025, and debt-to-GDP has fallen to 38.8% from 52.1% following a recent rebasing of GDP figures. Edun said this creates “greater fiscal headroom” for essential spending and paves the way for more sustainable public finance management.

Notably, over ₦2 trillion in contractor arrears from 2024 has been cleared, with 2025 capital budget releases now taking centre stage, Edun stated. He, however, cautioned that “despite appropriation, it is when funds are made available and authorised for spending that government entities should enter into binding commitments.”

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On the structural side, Nigeria is accelerating tax reforms and digitising revenue collection across ministries and agencies, in a bid to close leakages and raise the tax-to-GDP ratio, which remains one of the lowest globally. The new consolidated tax framework, due to take effect in January 2026, aims to eliminate over 50 overlapping taxes and simplify compliance.

“The narrative of Nigeria in 2025 is one of renewed stability,” Edun declared in closing. “But stability is not the destination—our task is to translate it into tangible improvements in the lives of Nigerians.”

That translation, he emphasised, hinges on sustaining and deepening ongoing reforms, attracting private investment, and boosting government efficiency.