May 29 (THEWILL) — Nigeria recorded a sharp decline in its fiscal deficit in the third quarter of 2025, signaling improving public finance management and stronger government revenue performance amid ongoing economic reforms.
According to the latest fiscal performance report released by the Budget Office of the Federation, the Federal Government posted a fiscal deficit of N330 billion in Q3 2025, a dramatic improvement compared to both projections and the corresponding period in 2024.
The report revealed that the deficit was N3.20 trillion lower than the projected quarterly shortfall of N3.53 trillion, representing a remarkable 90.68 percent reduction.
The latest figure also marked a significant drop from the N3.17 trillion deficit recorded in the third quarter of 2024.
Nigeria’s deficit-to-GDP ratio stood at 2.29 percent during the quarter, remaining comfortably below the 3 percent ceiling prescribed under the Fiscal Responsibility Act and ECOWAS fiscal convergence guidelines.
To finance the deficit, the Federal Government relied on a combination of domestic borrowing valued at N970 billion, privatisation proceeds of N120.61 billion, and multilateral and bilateral project-tied loans totaling N3.13 trillion.
The Budget Office attributed the improved fiscal position to stronger revenue mobilisation, enhanced tax administration, tighter expenditure controls, and reforms aimed at blocking leakages in public finance management.
In recent months, the government has intensified efforts to increase remittances from government-owned enterprises while implementing key reforms such as fuel subsidy removal and tax system restructuring to improve fiscal sustainability.
Despite the positive outlook, concerns remain over rising debt servicing costs, inflationary pressures, and Nigeria’s continued dependence on borrowing to finance infrastructure and development projects.
Analysts say the latest fiscal performance may strengthen investor confidence and provide breathing space for broader economic reforms if sustained over the coming quarters.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
