Nigeria’s worsening fiscal crisis came under intense scrutiny on Wednesday as the Senate Committee on Appropriations grilled the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, over persistent oil revenue shortfalls and the country’s ballooning N152 trillion public debt captured in the proposed 2026 Appropriation Bill.
Lawmakers demanded explanations for what they described as a troubling pattern of unrealistic oil revenue projections that have repeatedly fallen short. According to figures cited at the hearing, actual oil revenue underperformed projections by 18 per cent in one fiscal year and by as much as 36.5 per cent in another — a gap senators warned undermines the credibility of the federal budget framework.
Chairman of the committee, Solomon Adeola, described the recurring shortfalls as structural rather than incidental, pressing the minister to clarify how the government intends to plug widening revenue gaps while sustaining heavy security expenditure.
“These are not marginal variances. They are significant deviations that raise serious concerns about the integrity of our budget assumptions,” Adeola said, warning that persistent revenue gaps complicate fiscal planning and debt management.
Edun admitted the revenue gaps but defended the administration’s fiscal direction, insisting that macroeconomic reforms are stabilising the economy. He maintained that growth has rebounded to approximately four per cent.
“Our priority has been to stabilize the macroeconomic environment while ensuring national security. Growth has rebounded and reforms are yielding results,” Edun told lawmakers, arguing that difficult policy decisions were necessary to prevent deeper fiscal distress.
Also appearing before the committee, Chairman of the Nigeria Revenue Service, Zacch Adedeji, blamed the recurring shortfalls on what he termed “unrealistic and overly optimistic budgeting.” He noted that revenue projections frequently exceed operational capacity and often fail to adequately factor in oil market volatility.
Adedeji added that ongoing tax reforms and efforts to diversify government income streams are aimed at reducing Nigeria’s long-standing dependence on crude oil exports.
Nigeria’s oil sector continues to face multiple constraints, including pipeline vandalism, crude theft, underinvestment and technical production setbacks. Analysts have repeatedly warned that successive federal budgets have relied on daily output assumptions — often above 1.7 million barrels per day — that proved difficult to sustain.
Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, cautioned that consistent discrepancies between projections and outcomes weaken investor confidence.
“Persistent variance between projections and outcomes erodes investor confidence and complicates debt management,” Yusuf warned, noting that credibility in fiscal forecasting is central to sustainable economic management.
Development economist Pat Utomi echoed similar concerns, stating that overreliance on volatile commodity assumptions distorts long-term planning.
Read also:
- NACCIMA, Finance Minister Wale Edun forge alliance on economic reforms, $1 Trillion GDP vision
- IMF’s Gopinath meets Wale Edun as Nigeria pushes for economic reforms, stronger credit ratings
- Edun clarifies 5% fuel surcharge, reaffirms commitment to macroeconomic stability
“An economy that anchors its fiscal survival on volatile commodity assumptions will struggle with planning discipline,” Utomi said.
The heated session exposed deeper structural challenges confronting Nigeria’s public finances — from weak revenue mobilisation to the difficult balancing act between mounting security costs and rising debt obligations.
Edun pointed to reforms such as fuel subsidy removal, exchange rate unification and intensified non-oil revenue collection as measures designed to strengthen fiscal fundamentals and restore investor confidence.
However, senators insisted that headline growth figures must translate into measurable and sustainable revenue performance.
With Nigeria’s public debt projected at N152 trillion under the 2026 budget framework, the Senate’s intervention signals mounting legislative impatience with what critics describe as a cycle of optimistic budgeting followed by painful fiscal adjustments.
