Finance Minister Wale Edun says Nigeria’s economic reforms reflect fiscal correction aimed at long-term sustainability, not fiscal collapse.
The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, on Friday said recent trends in the nation’s economy did not indicate that the country was experiencing a fiscal collapse, but rather that it was undergoing what he described as a fiscal correction.
According to a media brief obtained from the office of the Minister, the current administration has chosen long-term sustainability over short-term illusion, adding that the distinction must guide public discourse going forward.
The explanation by Edun came the same day the Minister of Agriculture and Food Security, Senator Abubakar Kyari, declared that the federal government’s efforts to contain food inflation have started to pay off, adding that prices of essential food commodities had dropped by 50 per cent nationwide.
Also, the federal government has reassured foreign investors that Nigeria’s business environment remains secure and conducive for their investments.
Continuing, Edun pointed out that the current reforms are structural, transparency-driven, discipline enforcing and growth-enabling.
The document titled, “Deepening Public Understanding of Nigeria’s Fiscal Position,” was designed to correct misunderstanding arising from Edun’s recent appearances before the National Assembly. Such issues centred around debt service trends, public debt growth, revenue performance, and capital expenditure execution.
It alluded to key misconceptions observed in public discourse, noting that the
most widespread bordered on the lack of distinction between Federation Revenue and Federal Government Revenue.
Noting that Federation Revenue is not the same thing as Federal Government Revenue, it explained that nationally collected revenues are paid into the Federation Account and distributed monthly by the Federation Account Allocation Committee (FAAC) among the three tiers government.
The brief noted that while the statutory sharing formula often cited publicly is 52.68 per cent in favour of the federal government, 26.72 per cent for the states, and 20.60 per cent to local governments, this broad principle does not apply uniformly across all revenue types, adding that each revenue source has its
own allocation structure.
This, it stressed, was where the misunderstanding arose from.
Explaining that oil and gas shortfalls hit the government at the centre hardest, the minister said this was because the federal government gets a higher proportional allocation of revenues from oil and gas.
“The federal government receives approximately 53–65 percent of oil and gas revenues (depending on
components). VAT, by contrast, is shared 20 percent to the federal government and 80 percent to States and local governments,” It added, noting that the implication was that if oil revenue underperforms, the federal government suffers a disproportionately larger shortfall while the other tiers of government are relatively less affected.
The document pointed out that the 2024 and 2025 projected oil and Federation Revenue was N37.4 trillion while actual receipts stood at N7 trillion (19 per cent performance).
It argued that had the projection been met, the government at the centre would have received N15 trillion more.
The minister debunked claims that federal capital projects are not being implemented while also providing further clarification on the Nigeria Revenue Service (NRS) and Budget Office targets.
Edun admitted that federal capital projects are being under-executed, but not abandoned, debunking the narrative that such projects were not being implemented.
“There is a narrative that federal capital projects are not being implemented because MDAs’ capital releases appear low. This interpretation is incomplete,” Edun said, explaining that there are two components of federal capital expenditure.
“These are those funded by ministries, departments and agencies (MDA-funded capital), and Multilateral-tied Loans which are disbursed directly by development partners.”
He disclosed that in 2024, total capital expenditure (CAPEX) stood at N11.59 trillion (84 per cent performance) while the 2025 performance was N11.7 trillion or 76 per cent.
On debt, he argued that an increase in debt service does not translate to fiscal recklessness, adding that in 2024 and 2025, debt service overshot projections.
According to him, while budgetary provision for debt service in 2024 was N8.56 trillion, the actual service was N12.63 trillion (an increase of N4 trillion).
Also, in 2025, the budgeted debt service was N13.12 trillion while the actual service gulped N14.57 trillion or N1.45 trillion higher.
These increases, he said, were driven by macroeconomic factors, including naira depreciation and higher domestic interest rates.
He stated that Nigeria’s debt is not growing uncontrollably, noting that it had grown in nominal naira terms.
