The report showed that total government revenue during the period stood at ₦5.97 trillion, while aggregate expenditure rose to ₦8.63 trillion, resulting in the deficit, which was largely financed through domestic borrowing. Despite weak revenue performance, the government maintained priority spending on non-discretionary obligations, particularly debt servicing and personnel costs.

According to the Budget Office, budget implementation faced challenges due to subdued but gradually improving revenue outcomes, even as the government continued to meet essential expenditure commitments. Oil sector performance remained a major constraint, with average crude oil production at 1.68 million barrels per day, significantly below the budget benchmark of 2.12 million barrels per day.

Between April and June 2025, aggregate Federal Government revenue stood at ₦5.23 trillion, representing 58.45 per cent of the prorated target. Oil revenue contributed ₦1.50 trillion, accounting for 28.50 per cent of total receipts, but fell short of expectations by 71.50 per cent, reflecting ongoing production challenges and price volatility.

In contrast, non-oil revenue performance surpassed projections, reaching ₦8.90 trillion and accounting for 85.60 per cent of total revenues. This improvement was attributed to stronger collections from Company Income Tax, Value Added Tax, Electronic Money Transfer Levy, and Education Tax, validating ongoing reforms in compliance enforcement, customs automation, and improved remittance of independent revenues.

Total expenditure, including spending by government-owned enterprises and project-tied loans, amounted to ₦8.63 trillion, compared to a prorated target of ₦13.75 trillion. Capital releases to ministries, departments and agencies stood at ₦393.86 billion, while non-debt recurrent expenditure reached ₦2.72 trillion during the quarter.

However, debt servicing consumed ₦4.44 trillion, exceeding projections by 24.10 per cent, largely due to rising domestic debt obligations. The report warned that the debt service-to-revenue ratio remained elevated, significantly constraining fiscal space despite gains recorded in non-oil revenue.

The Minister of Budget and Economic Planning, Senator Abubakar Bagudu, stated that notwithstanding mounting fiscal pressures, the Federal Government remained committed to capital investment and strengthening domestic revenue mobilisation to ensure long-term fiscal sustainability. He disclosed that the economy recorded real GDP growth of 4.23 per cent during the period, driven mainly by the services and non-oil sectors.

Bagudu added that inflation moderated to 22.22 per cent, while external reserves declined to $37.82 billion, reflecting persistent revenue shortfalls from both oil and non-oil sources. He noted that volatility in oil revenue continued to expose public finances to production and pricing shocks, while structural weaknesses and lower global prices further constrained fiscal outcomes.

The Budget Office stressed the need for urgent revenue mobilisation and expenditure reprioritisation to restore fiscal balance, admitting that cash management bottlenecks, particularly delays in bottom-up cash planning, continued to slow project execution and raise cost risks.

Among other measures, the report recommended aligning oil production assumptions with verifiable capacity, adopting conservative oil price benchmarks, deepening compliance enforcement, rationalising tax expenditures, accelerating e-customs implementation, and improving independent revenue remittance. It also called for value-for-money audits, prioritisation of high-impact projects, and reforms in debt management aimed at reducing the debt service-to-revenue ratio to sustainable levels in 2025.

The report recalled that the 2025 Appropriation Act, titled Budget of Restoration: Securing Peace, Rebuilding Prosperity, is anchored on stabilising the economy, improving livelihoods, and laying the groundwork for sustainable long-term growth under the Renewed Hope Agenda.