… Targets 7% GDP growth as reforms gain traction
… MOFI identifies N38trn underutilised public assets
The federal government on Monday announced a revenue performance of N6.9 trillion in the first quarter (Q1) of 2025, representing a 33 percent increase from N5.2 trillion generated in the same period of 2024.
However, the revenue fell short of the projected target of N10 trillion on a pro-rata basis, representing a 31 percent shortfall.
By implication, the federal government might have sought means of closing the revenue gap, possibly through debt financing (borrowing).
As of December 31, 2024, Nigeria’s total public debt stood at N144.67 trillion, according to the Debt Management Office (DMO).
President Bola Tinubu, in late May, requested the National Assembly’s approval to secure fresh $24.14 billion. The new loan might have pushed the nation’s total debt to N183 trillion.
Wale Edun, minister of finance and coordinating minister of the economy, stated this during the Q2 2025 Citizens and Stakeholders’ Engagement Session in Abuja, where he outlined the administration’s efforts to stabilise the economy, curb inflation, boost investment, and rebuild confidence in Nigeria’s fiscal outlook.
He noted that the jump in revenue reflects the early gains of ongoing economic and institutional reforms.
He noted that the administration is now targeting a seven percent gross domestic product (GDP) growth rate, leveraging improved revenue collection, fiscal discipline, and private sector-led growth to achieve broader economic stability.
Edun also noted that recent indicators, including rising external reserves, improved revenue performance and inflation reduction point to a positive trajectory, with reforms already laying the groundwork for sustained and inclusive growth.
Edun described Nigeria’s current economic phase as one of stabilisation and recovery following bold structural reforms initiated at the beginning of the Tinubu administration.
He said reforms such as the adoption of market-based pricing for foreign exchange and petroleum products have restored investor confidence and created a more transparent environment for economic activity.
The minister stated that those early measures, though challenging, were critical in attracting domestic and foreign investment, as they created a predictable and rules-based system that entrepreneurs, businesses, and even startups could rely on.
He noted that the economy has now entered a third phase, which focuses on deepening investments to drive productivity in sectors such as agriculture, manufacturing, and services, with the ultimate goal of reducing multidimensional poverty.
Citing a recent visit by Shell executives, Edun revealed that the oil giant plans to invest $5.5 billion in Nigeria this year, countering perceptions that major players are pulling out of the country.
According to him, the current economic environment has become more attractive and stable, encouraging further investments across key sectors.
The minister emphasised that while Nigeria’s real GDP growth is currently between 3.4 and 3.8 percent, this is still below the government’s target.
Recent data from the National Bureau of Statistics (NBS) show that inflation has begun easing, with the latest figure at 22.97 percent.
Edun said this downward trend signals that the country is moving in the right direction, commending the Central Bank of Nigeria (CBN)’s market-based forex policy for helping to eliminate the black-market premium, which previously allowed individuals to exploit exchange rate arbitrage.
“With that gap narrowed, speculative activity has reduced, and investor confidence has grown,” he added.
Nigeria’s external reserves have also improved significantly, rising from a low of about $3 billion to over $23 billion in two years.
On the fiscal side, Edun disclosed that revenues increased from N12.5 trillion in 2023 to nearly N21 trillion in 2024, driven by aggressive reforms, digital systems, and tighter control of leakages.
He said the government holds daily fiscal review meetings to ensure consistency in data from the DMO, Budget Office, and the Office of the Accountant General.
Edun explained that revenue from the federation account has grown, translating to increased allocations to states and local governments.
“Nigeria’s macroeconomic progress has not gone unnoticed. International credit rating agencies Fitch and Moody’s have upgraded the country’s ratings.
“These upgrades are expected to reduce borrowing costs, improve investor sentiment, and contribute to lower domestic interest rates,” Edun said.
Turning to housing, Edun said the Ministry of Finance Incorporated Real Estate Investment Fund (MREIF) has already begun making a tangible impact.
“In less than two months since its launch, the fund has disbursed mortgages worth N6.9 billion to 159 beneficiaries in six pilot locations including Abuja, Lagos, Kano, Rivers, Abia, and nearby states.”
He noted that the fund is designed to address the housing deficit estimated between 20 to 28 million units.
The minister further explained that debt service to revenue ratio, which stood at a staggering 150 percent in Q1 2023, has now dropped to around 60 percent, and will continue to fall as government revenue improves.
N38trn public assets
Armstrong Takang, managing director of the Ministry of Finance Incorporated (MOFI), revealed that N38 trillion worth of value has been identified across 20 public assets, with the figure expected to rise as further evaluations continue.
He noted that MOFI is committed to unlocking and optimising the value of public assets as part of its broader goal to build a N100 trillion capital base.
“The N38 trillion discovery forms part of MOFI’s ongoing strategy to recover underutilized assets and channel them into productive use,” he said.
“MOFI is also advancing initiatives aimed at optimising investment assets and, where necessary, executing transparent divestments.
“As part of this strategy, the agency is actively pursuing partnerships with the private sector, especially through Public-Private Partnerships (PPPs), to attract long-term capital into the Nigerian economy,” he said.
He added that Nigeria needs to build around 700,000 houses annually but currently manages only about 100,000 units each year.
He stressed that it would take about N60 trillion to close the housing gap, underlining the need for long-term, low-cost financing and private sector involvement.
The MREIF, registered with the Securities and Exchange Commission, is rated AAA by local rating agencies and aims to attract both public and private capital for housing development.
Support for small businesses
Beyond housing, the minister noted that support for micro, small and medium enterprises (MSMEs) remains strong.
Through the Bank of Industry (BOI) and other channels, businesses are accessing grants and low-interest loans, especially important at a time of elevated interest rates, he noted.
He said the government is committed to ensuring that even micro enterprises can access finance to expand their operations, employ more people, and contribute to reducing the cost of living through increased output.
Edun announced that the government is also introducing new long-term mortgages backed by a mix of foreign development funds and local pension funds.
These mortgages are being offered at rates as low as nine percent for terms of up to 25 years, helping more Nigerians afford to own their homes.
Power sector output
In the power sector, the minister reported a 40 percent increase in electricity output, thanks to tariff reforms, targeted subsidies, and a major metering initiative.
He said the government is also pursuing distributed renewable energy with support from the World Bank and African Development Bank, as part of a continental goal to connect 300 million Africans to power by 2030.
(BusinessDay)
