FG confident of reaching N36tn revenue target

• Published On: 14 January 2025 at 18:22

The Federal Government is confident of meeting its N36.35 trillion revenue target for 2025, citing ongoing economic reforms under President Bola Tinubu's administration.

This was revealed by the Minister of Budget and Economic Planning, Abubakar Bagudu, during a hearing at the National Assembly Joint Committees on Finance, where the 2025 Appropriation Bill was discussed, according to a press release issued on Monday.

In his statement, Bagudu emphasised the benefits of the administration's recent reforms, particularly the elimination of fuel and foreign exchange subsidies.

He stated that these changes have already begun to improve revenue generation at all levels of government, with noticeable improvements appearing in the Federation Account as early as October 2023.

The Minister expressed confidence that the positive revenue trend would continue, driven by savings from subsidy removals.

He also stated that the 2024 budget, as the administration's first full-year budget, provided valuable lessons that informed the assumptions for the 2025 budget.

"The primary assumptions and lessons were the removal of the fuel subsidy and its effect on revenue and expenditure, the removal or deregulation of the foreign exchange market and its impact on both government revenue and spending, and other price-distorting issues, such as electricity, which have yet to be fully addressed.

"All the major, bold, and courageous steps taken with the support of the National Assembly are intended to generate more revenues for the three tiers of government, correct distortions in the economy, and improve expenditure efficiency so that we can ensure that the revenue generated goes a long way," said Mr. Obama.

He revealed that President Tinubu has directed all revenue-generating Ministries, Departments, and Agencies (MDAs), as well as Government-Owned Enterprises, to step up their efforts to increase national revenue.

In addition to the subsidy removals, he emphasised the government's plan to increase oil production at a lower cost, which is expected to boost the country's treasury.

Based on an oil price of $75 per barrel and an exchange rate of N1,500 to the dollar, the government expects to produce 2.06 million barrels per day.

The National Assembly has already approved the 2025 Medium-Term Expenditure Framework and Fiscal Strategy Paper, which includes these projections.

Despite a projected deficit of N13.08 trillion, Minister Bagudu is confident that the administration will generate enough revenue to cover the N49.74 trillion in proposed expenditures for 2025.

He emphasised that the lessons learnt from implementing the 2024 budget, the current administration's first full-year budget, will be critical in assisting the government in meeting its fiscal targets for 2025.

The Minister outlined key takeaways from the 2024 budget, emphasising the critical role of fuel subsidy removal in increasing revenue generation and expenditure efficiency.

He also cited the deregulation of the foreign exchange market, which has had a direct impact on government revenue and spending, as a major contributor to the optimistic projections for 2025.