By Nathaniel Zaccheaus, Abuja
Confronted by a ballooning debt profile and chronic revenue shortfalls, the Federal Government has announced a decisive shift in fiscal strategy, signalling a move away from heavy borrowing toward aggressive revenue mobilisation and a nationwide savings drive to stabilise the economy.
The new approach was unveiled on Monday by the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, during an interactive session with the Senate Committee on Finance on the 2026–2028 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).
Edun said the policy rethink had become inevitable as Nigeria grapples with mounting fiscal pressures, weak revenue performance and the limits of debt-funded budgeting.
According to him, Nigeria’s total public debt now stands at about ₦152 trillion, up from roughly ₦70 trillion in 2023.
He, however, clarified that much of the increase did not result from fresh borrowing.
He explained that about ₦30 trillion came from the formal recognition and regularisation of Ways and Means financing previously kept off official records, while nearly ₦50 trillion arose from foreign exchange revaluation following Central Bank reforms to clear FX backlogs and rebuild external reserves.
“In effect, close to ₦80 trillion of the debt stock did not arise from new borrowing, but from adjustments, regularisation and reclassification,” Edun told lawmakers.
He stressed that the thrust of the new MTEF was to drastically curb borrowing while prioritising revenue mobilisation, fiscal discipline and sustainability.
*Finance Minister, Edun, admits deep revenue gaps
The Minister admitted that revenue performance had consistently fallen far below projections, severely undermining budget implementation.
He disclosed that while total revenue for 2024 was estimated at ₦25.9 trillion, actual federal government revenue stood at about ₦8.27 trillion.
A similar gap, he said, was evident in 2025, when a projected ₦40 trillion revenue target yielded only about ₦10 trillion in actual inflows, leaving a shortfall of roughly ₦30 trillion.
“These gaps were bridged through treasury management measures and borrowing, but that approach is no longer sustainable,” Edun said, adding that more realistic revenue assumptions would guide the 2026 budget framework.
To address the challenge, he announced an extensive revenue optimisation programme anchored on automation, digitalisation and process re-engineering.
Four circulars, he said, had been issued directing revenue-generating ministries, departments and agencies (MDAs) to migrate to transparent digital platforms, discontinue cash collections and remit revenues directly to the Treasury Single Account.
Regarding budget execution, Edun disclosed that the capital component of the 2024 budget had been extended into 2025, with funding available for completed projects through September, while outstanding commitments would be rolled into the 2026 budget, subject to legislative approval.
He added that only about 30 per cent of the 2025 capital budget had been funded so far, with the remainder expected to spill into 2026.
Despite the strain, he said the government had continued to meet critical obligations, including salaries, pensions, statutory transfers and debt servicing.
Beyond revenue, Edun underscored the need to mobilise domestic savings to drive long-term growth.
He revealed that President Bola Tinubu was considering a public-private partnership initiative to encourage millions of Nigerians outside formal pension and capital market schemes to save and invest, thereby reducing pressure on government borrowing.
*Senate orders FIRS to raise target to ₦35trn as lawmakers condemn rollover of multiple budgets
Meanwhile, Chairman of the Senate Committee on Finance, Senator Sani Musa, urged the Federal Inland Revenue Service (FIRS) to intensify nationwide public enlightenment ahead of the implementation of new tax reform laws scheduled for January next year.
He warned that poor public understanding could undermine the reforms.
The Senate also directed FIRS to review its 2026 revenue projection upward from ₦31 trillion to ₦35 trillion, while lawmakers frowned at the continued rollover of multiple budgets, describing it as a sign of weak planning and declining fiscal credibility.
