FG To Tighten Spending, Raise Oil Output Amid Revenue Shortfall
The Federal Government has announced plans to prioritise critical spending and increase oil production as a response to falling global oil prices, which have slipped below the benchmarks used in the 2025 budget.
The Minister of Finance, Wale Edun, revealed the strategy on Thursday during the spring meetings in Washington D.C., United States.
“Our budget was based on 2 million barrels a day at $75 per barrel, and we are now underwater relative to those assumptions,” Edun said.
“When your budget revenue is below expectation, you have to hunker down, conserve, and prioritise.”
He explained that the government will focus first on essential payments, including salaries, pensions, statutory obligations, debt servicing, and security funding.
To improve oil revenues despite market fluctuations, Edun said the Nigerian National Petroleum Company (NNPC) Limited has been directed to scale up production and cut costs.
The finance minister also spoke about the administration’s longer-term strategy to diversify Nigeria’s economy away from crude oil. According to him, the country is on track to achieve a domestic refining capacity of 1.2 million barrels per day.
“That gives us extra complexity in the economy and opens new doors for industrialisation through petrochemicals, plastics, pharmaceuticals, and building materials,” he said, adding that market-based reforms have been instrumental in attracting new investments into the sector.
Addressing concerns about Nigeria’s budget deficit, Edun acknowledged that the country currently exceeds the 3 percent of GDP limit set by the Fiscal Responsibility Act. However, he assured that the government is working to rein in the deficit.
“This is a government that believes in the rule of law and the sanctity of contracts. We try to get within the law,” Edun said.
He noted that efforts to ease fiscal pressure and bridge the budget gap will also include asset optimisation, public-private partnerships, and a renewed drive for privatisation.
In fact, Edun said the 2025 budget already includes a line item for asset sales, which may surpass initial projections due to increasing investor interest.
According to the minister, President Bola Tinubu’s broader economic plan is to stabilise the economy and encourage investments that lead to job creation and poverty reduction.
He concluded by stating the government is committed to enacting structural reforms and improving the business environment: “to enable the private sector to invest, make profits, and pay taxes that we can channel into critical infrastructure and services”.
FG To Tighten Spending, Raise Oil Output Amid Revenue Shortfall is first published on The Whistler Newspaper
