Nigeria’s fiscal deficit crashes to N330 billion in Q3 2025, down 90% from target

The Federal Government’s fiscal deficit narrowed sharply to N330 billion in the third quarter of 2025. This is a massive drop from the N3.53 trillion projected for the period. The Budget Office of the Federation disclosed this in its latest fiscal performance report.

The deficit was 90.68% lower than the quarterly target. It also fell far below the N3.17 trillion deficit recorded in Q3 2024. The deficit-to-GDP ratio stood at 2.29%, within the 3% limit set by Nigeria’s Fiscal Responsibility Act and ECOWAS rules.

What the report is saying

The Budget Office attributed the improvement to stronger revenue performance and tighter expenditure management. The government borrowed N970 billion domestically to finance the deficit. It also raised N120.61 billion from privatisation proceeds and secured N3.13 trillion in multilateral and bilateral project-tied loans.

“The Q3 2025 fiscal deficit was also by far lower than the N3.17 trillion deficit recorded in the third quarter of 2024,” the report stated. Officials said better tax administration and higher remittances from state-owned enterprises helped. Reforms to cut leakages in public finance also played a role.

Get up to speed

Nigeria has struggled with persistent fiscal deficits for years. Weak oil revenues, subsidy spending, rising recurrent costs, and exchange rate pressures have been key drivers. Debt servicing costs and revenue shortfalls have added to the strain.

The government has relied heavily on domestic and external borrowing to close gaps and fund infrastructure. Recent reforms, including fuel subsidy removal and tax administration changes, aim to boost revenue and improve fiscal health.

But concerns remain. Debt service obligations are still high. Inflation continues to pressure the economy. Borrowing dependence has not eased completely.

What you should know

Earlier reports from Nairametrics showed that Nigeria’s fiscal deficit hit N13.51 trillion in 2024, exceeding targets and breaching the Fiscal Responsibility Act limit. The government also recorded N11.89 trillion in fresh borrowings in the first nine months of 2025 but spent only N3.10 trillion on capital projects. The loans included N7.08 trillion from domestic sources and N4.81 trillion from multilateral and bilateral project-tied loans.

The Federal Government has increased its planned borrowing for 2026 to N29.20 trillion, following an expansion in the proposed budget size and fiscal deficit.