Despite the recent assertion by President Bola Ahmed Tinubu that the Federal Government has met its revenue target for 2025, indicating that the various reforms introduced by the administration have taken root and begun to yield dividends, the gains are yet to rub off on the masses who are still battling high cost of living, unemployment and dilapidated infrastructure across sectors, COLLINS OLAYINKA and JOSEPH CHIBUEZE write.

• Experts Task President On Improved Welfare For The Masses

• Average Nigerian Struggling With Inflation, Food Shortage, Unemployment – Alayande, Oyedokun, Others

The recent revelation by President Bola Ahmed Tinubu that Nigeria has met its revenue target for the year has raised many posers for the Federal Government: Why is Nigeria still borrowing if the country met its revenue target for 2025 as early as August? Why are the costs of basic foods too high for most Nigerians? Why is the quality of life more abject in 2025 than it was in June 2023 when President Tinubu took over from the late president Muhammadu Buhari?

Tinubu, while playing host to former members of the defunct Congress for Progressive Change (CPC) at the Presidential Villa, Abuja, recently, declared: “I can brag that Nigeria is no longer borrowing any dime from local banks to run the economy. I also no longer care about what President Donald Trump is doing on the other side.

“Thank you for believing in me. The economy is stabilised; nobody is trading piece of paper for exchange rate anymore. When I took over it was N1900 to a dollar. It’s N1,450 now. Rates have been stabilising now; you don’t have to know a CBN governor to be rich. All you have to do is export and import and create jobs for the people. What we need now is building the ship. That is my guarantee.”

The Federal Government’s revenue target for the year 2025, as stipulated in the 2025 Appropriation Act, was N18.32 trillion, comprising N7.94 trillion expected from oil revenue, and N10.39 trillion from non-oil sources.

Additionally, budget documents indicate that the expected total revenue for 2025 – including all sources – is significantly higher at N36.35 trillion, based on macro-fiscal assumptions such as oil production, pricing, and exchange rates. The N18.32 trillion refers to the government’s realistic revenue projection in its budget plan, while the larger N36.35 trillion reflects a more ambitious aggregate expectation aligned with macroeconomic forecasts.

As at May 29, 2023, when President Tinubu assumed office, the inflation rate was 22.41 per cent. He also inherited a rising public debt profile which hit N97.34 trillion ($108.23 billion) as of December 31, 2023, according to data from the Debt Management Office (DMO).

While experts had raised concerns about the rising debt, the government had on its part argued that the problem was not the debt but a poor revenue generation culture.

To address the challenge, the Tinubu administration introduced some drastic reforms including the removal of the fuel subsidy, which was believed to be draining the public purse, and the unification of the exchange rates. It also embarked on tax reforms to broaden the tax net.

The reform measures introduced by the government threw the entire country into hardship, with the exchange rate hitting N1,900/$ and inflation rising to as high as 34.80 per cent. The monetary authorities also maintained a tight monetary policy, raising the interest rate to 27.5 per cent.

But these measures appear to be yielding results as the exchange rate has hovered between N1,600/$ and N1,530/$ in the last few weeks. Inflation rate, after rebasing by the National Bureau of Statistics (NBS), has also seen a downward trend to 21.88 per cent in July 2025. There has also been a significant impact from subsidy removal and exchange rate unification, as well as improvements in revenue collection by some agencies following improved monitoring and use of technology.

The country has also seen a large measure of improvements in the Value Added Tax (VAT) revenue and to some extent in the Company Income Tax (CIT). It has also experienced a rise in its oil production, which reached as high as 1.8 million barrels per day from the previous 1.4 million barrels per day. Specifically, Nigeria’s non-oil revenues hit N15.69 trillion, their strongest fiscal performance in recent history. From January to August 2025, total collections reached N20.59 trillion, a 40.5 per cent increase from N14.6 trillion recorded in 2024, with non-oil revenue accounting for about 75 per cent.

With improved revenue, the Federation Account Allocation Committee (FAAC)’s allocation to the three tiers of government has virtually doubled. Monthly allocations to states and local governments crossed N2 trillion in July 2025, providing sub-national governments with greater fiscal space to fund food security, infrastructure, and social services.

Conversely, from N97.34 trillion in December 2023, the total public debt has climbed to N149 trillion and is projected to hit N200 trillion by the end of the year. The 2025 budget has a deficit of N13 trillion, which the government hopes to finance through borrowing. Nigeria mostly relied on the domestic market for deficit financing in the first half of this year, with the government raising about N3 trillion through Treasury Bills and Bonds, suggesting that a further net issuance of about N10.08 trillion may be required to cover the estimated deficit for 2025. This is as most public infrastructure remains decrepit, with the Nigeria Governors’ Forum (NGF) disclosing recently that the country needs at least $100 billion yearly over the next decade to bridge the gap.

Recognising the gains that have been recorded, the World Bank recently noted that the Nigerian economy has regained macroeconomic stability thanks to the reforms, but challenges like high inflation rate, food price pressures, and security threats persist.

The Bretton Woods institution insisted that to solidify the recovery, the Tinubu administration must accelerate structural reforms, boost productivity, improve social infrastructure, and combat insecurity that is ravaging many parts of the country to ensure a broader impact across the population.

Speaking with The Guardian, experts acknowledged that the reforms initiated by the administration are working, hence the rise in revenues and a broadening base, but insisted that priority should be placed on translating the impressive numbers into real relief for citizens by putting food on their tables, creating jobs for young people, and investing in roads, schools, and hospitals.

They argue that rather than increasing shareable funds at the FAAC, the government should prioritise adequate funding of education and the health sector while focusing on building an efficient transportation system that is anchored on the availability of luxurious buses and safe roads.

An Investment banker, Tolulope Alayande, identified building export capacity, specifically building ships and vessels for the export of goods, as a further strategy the government could use to boost revenue that should translate to improved welfare for the citizenry.

He also advised the government to roll out agricultural mechanisation centres across all regions to serve as training hubs as well as pillars for achieving food sovereignty.

“The government must also remain focused on deepening fiscal reforms. There is a possibility of falling to the temptation of relaxing some policies that look like ‘punishing’ Nigerians who are achieving the results we are seeing now. The government must be vigilant. It must not change what is working while exploring ways of making them work better for the well-being of the people. The government is driving structural tax reform. The Senate recently passed bills to raise VAT from 7.5 per cent to 12.5 per cent, and transferred responsibilities like royalty and petroleum tax collection to a unified Nigeria Revenue Service (NRS). These reforms aim to expand Nigeria’s low tax-to-GDP ratio and bolster domestic revenue sustainably,” he said.

According to Alayande, though the oil industry has been recording impressive results, more needs to be done to reach where the country wishes to be in terms of expected revenue.

Alayande submitted that meeting revenue targets is just the beginning, saying the administration faces the task of translating fiscal gains into lasting improvements in infrastructure, food security, economic diversification, and inclusive development.

He added: “The challenge will be to deliver real changes that Nigerians feel in their everyday lives.”

The Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, also warned that the government should not be carried away by what he called money illusion.

He said the figure being bandied by the government may look big on paper, but not so in real terms.

“I must emphasise that we need to be careful not to fall into what one may call money illusion. In other words, these are nominal figures. In real terms, the increase may not be as high as it appears because what you could buy with N1 million two years ago, you probably need about N2 million or more to buy it now,” Yusuf said.

He said the nominal figures may not actually reflect the level of effective growth in revenue, arguing that if one discounts this revenue for inflation or the exchange rate depreciation, it may not be as high as it looks.

On what should be the focus of the government going forward, Yusuf said there are critical areas that the government should pay attention to.

“We have challenges of infrastructure, productivity, food security as well as security of lives and property. All of these things require huge sums of money,” he said.

Yusuf said one of the major challenges the government was having is that there is a mismatch in the size of the economy and the size of the budget. For him, the budget is far too small to service the economy.

His words: “The revenue base we have cannot effectively support the size of our economy even with this so-called increase in revenue. You can do a comparative analysis. For instance, Nigeria’s 2025 budget is just about $36 billion; the budget of South Africa is $141 billion; the budget of Egypt and Algeria are close to $100 billion. So, there are still major issues around the capacity to generate the revenue that is commensurate with the size of the economy and the size of revenue that can make a significant impact.

“It is important that our governments at all levels get their priorities right, spending on things that can impact the welfare of the people, things that can improve productivity in the economy. We still have a lot of work to do to ensure we generate the right kind of revenue or optimise revenue opportunities in the country without adding more pressure or burden on the citizens.”

An economist, Prof. Adi Bongo, urged Nigerians to exercise both caution and patience in evaluating President Bola Tinubu’s claims that his administration has successfully met the 2025 revenue target.

Bongo, who lectures at the Pan Atlantic University, Lagos, during a recent television interview, acknowledged improvements in non-oil revenue and oil production, but warned that borrowing and inflationary pressures still pose serious challenges to the economy.

“If he says that we have met the revenue target for 2025, I would believe that he is talking about the budget for 2025, which is about N54.9 trillion. And then the Federal Government’s component of revenue there is about N27.5 trillion,” he said.

He stated that If President Tinubu’s statement is accurate, then the administration would indeed be in a stronger position to prosecute the 2025 budget. He, however, noted the uncertainty surrounding the government’s data.

He stressed that improved revenues alone mean little if they do not translate into better living standards. “It’s not enough to meet revenue targets. The big question is: How does this translate to benefits for Nigerians?” he asked.

Bongo further explained that reduced government borrowing could provide much-needed breathing space for the private sector.

“If we see interest rates beginning to drop going forward, then we know the President is actually right. But if interest rates remain where they are, then we want to see a rise in lending to the private sector before we can believe what the president is saying,” he added.

For Prof. Godwin Oyedokun, a professor of Accounting and Financial Development at Lead City University, Ibadan, meeting government’s revenue target may be a positive signal for the economy, showing improved capacity to generate funds from taxes and other sources.

“However, for the average Nigerian struggling with inflation, unemployment, and high living costs, this achievement means little unless the revenue is used to improve daily life,” he said. “Without transparency and visible investments in welfare and infrastructure, the celebration of revenue milestones feels disconnected from the reality of citizens.”

To ensure revenue growth translates into real impact, Oyedokun said the government must invest in critical sectors that directly affect people’s lives. These include improving food security through support for local farmers, stabilising energy supply to cut costs for households and businesses, and expanding public transport to ease fuel-related burdens.

“Equally important are stronger healthcare and education systems, targeted social protection schemes for vulnerable groups, and industrial development to create jobs for the growing youth population,” he noted.

Nigeria mobilised N20.59 trillion in eight months, the most substantial collection in recent history as the non-oil sector emerged as the powerhouse of revenue for the government. With N15.69 trillion collected, non-oil revenues account for three out of every four naira, showing a fundamental shift away from oil dependence.

While inflation and foreign exchange revaluation contributed, the uplift is primarily reform-driven, especially in digitised filings, Customs automation, tighter enforcement, and broadened compliance.

Though Customs recorded impressive figures, experts have urged caution, saying the role of the Customs Service in economic development is to facilitate trade and not primarily to collect revenue for the government. The Nigeria Customs Service (NIS) garnered a record N3.68 trillion within the first six months of the year, which is N390 billion above target, and already 56 per cent of the full-year goal.

With the government affirming that collections are ahead of pro-rata expectations, experts insist that an official declaration by the Budget Office at the end of the current year will either validate Tinubu’s claims or otherwise. (The Guardian)