Nigeria’s capacity to reach its ambitious Revenue target of ₦36.35 trillion for 2025 have come under scrutiny following a recent report by PricewaterhouseCoopers (PwC). The report, titled Nigeria’s 2025 Budget and Economic Outlook, provides an in-depth analysis of Nigeria’s economic opportunities and dilemma, including oil output uncertainty, fiscal constraints, and external market forces. According to the report, government reforms are expected to boost revenue in 2025; though, but, it is unlikely that the ₦36.35 trillion revenue target would be reached due to oil income constraints and low Tax base.
Despite Nigeria closing in on its OPEC production quota of 1.5 million Barrels Per Day (bpd) in December 2024, the government’s projection for 2025—2.06 million bpd—requires a 37% increase. This target hinges on significant improvements in security, regulatory frameworks, and Investment in the oil sector. Recall that the Federal Government of Nigeria had benchmarked the 2025 budget and the 2025–2027 Medium Term Expenditure Framework (MTEF) on a global oil price of $75 per barrel. According to PwC’s analysis, this target is “most likely” attainable, pointing out that the average global oil price in 2024 was $78.05 per barrel.
Revenue growth prospects and challenges for 2025.
However, the excess supply that the U.S. President Donald Trump is pushing may cause a global market crash. If prices dip below the $75 per barrel benchmark, Nigeria’s oil-dependent revenue structure may struggle to meet expectations. Increased tax revenues and improved oil output led to a notable improvement in revenue generation in the past year. With the pro rata budget at 73.8% of its total as of August 2024, 2025 is expected to see sustained growth.
Importantly, it added, effective tax reforms may contribute to meeting the non-oil revenue target. Increased government expenditure in 2024 had a major effect on Inflation and liquidity, making efforts to control inflation more difficult. It suggested that fiscal and monetary authorities should make sure their policies complement one another to provide a stable and favorable climate for investment and development in 2025. Between January and October 2024, diaspora remittances through IMTOs totaled $4.22 billion, almost tripling the $2.62 billion sent during the same time period in 2023.
Outlook for remittances and diaspora contributions in 2025.
Moving forward in 2025, improved economic conditions in developed economies and encouraging actions by The Central Bank of Nigeria (CBN) are expected to fuel this increase. Despite a 65% decline in FDI, FPls and other investments contributed to a 152% increase in total capital importation in 2024, which reached $2.6 billion. The outlook for FDI in 2025 is cautiously optimistic, while FPls is anticipated to continue growing due to favorable market conditions and ongoing economic reforms.
The country’s total direct remittances are expected to rise in 2025, building on the previous consistent diaspora remittance inflows, which averaged $20 billion in the past decade. This was driven by improved economic conditions in advanced economies as their monetary authorities continue to lower policy rates, supportive measures taken by the CBN to increase remittances (like granting licenses to new IMTOs, implementing a willing-buyer willing-seller model, and guaranteeing IMTOs timely access to Naira liquidity), and increased interaction with Nigerians living overseas by the Nigerians in Diaspora Commission.
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With debt servicing consuming a substantial portion of Government Revenue and Economic Diversification efforts progressing slowly, achieving the ₦36.35 trillion revenue target will require bold fiscal policies, increased foreign investment, and stronger enforcement of revenue collection. The stability of oil prices, improved Security in the oil-producing regions, and the effectiveness of tax reforms in closing the revenue gap will be key factors in determining the success of Nigeria’s 2025 economic strategy, which aims to address fiscal imbalances but depends on effective implementation to sustain economic stability.