Nigeria’s ambitious N36.35 trillion revenue projection for 2025 faces serious risks due to volatile global oil prices and geopolitical uncertainties, a new report by PricewaterhouseCoopers (PwC) has warned. The “2025 Nigeria Budget and Economic Outlook” report highlights concerns over the country’s heavy reliance on crude oil exports, emphasizing that to meet its revenue target, Nigeria must increase crude oil production by 37% from an average of 1.5 million barrels per day (bpd) in 2024 to 2.06 million bpd in 2025 at a benchmark price of $75 per barrel.
PwC noted that while Nigeria achieved its OPEC production quota of 1.5 million bpd (excluding condensate) in December 2024, sustaining and increasing output would require improved security, regulatory stability, and investment in oil fields such as Bonga deepwater (Shell) and Ubeta upstream (TotalEnergies).
Revenue and Economic Risks
- Oil Dependency: In H1 2024, oil exports surged to N34.87 trillion, nearly 14 times higher than non-oil exports. While Nigeria’s trade surplus grew 511% year-on-year (reaching N6.95 trillion in Q2 2024), the report warns that this surplus remains highly vulnerable to fluctuations in crude oil prices.
- Exchange Rate Challenges: The government’s projected N1,500/$ exchange rate will depend on increased diaspora remittances and foreign investment to maintain a positive balance of payments.
- Debt Sustainability Concerns: Nigeria’s debt-to-GDP ratio stood at 50.7% in October 2024, exceeding the 40% threshold, while the proposed fiscal deficit of N13.8 trillion (3.87% of GDP) in 2025 surpasses the 3% limit set by the 2007 Fiscal Responsibility Act. Rising bilateral and multilateral debt raises concerns about long-term financial sustainability.
Non-oil Revenue & Tax Reforms
PwC emphasized that diversifying Nigeria’s exports is crucial, especially with a weaker naira under the floating exchange rate. Investments in value-added production, export incentives, and improved logistics could reduce dependency on crude oil and enhance non-oil revenues.
While revenue generation improved significantly in 2024, driven by higher tax revenues and increased oil production, PwC doubts that the N36.35 trillion revenue target will be achieved due to oil revenue constraints and a low tax base. The report stresses that effective tax reforms will be essential to boost non-oil revenue and mitigate external risks.
