Cowry Asset Management has claimed that Nigeria’s 2025 budget is coming under increasing strain halfway into the fiscal year as weak revenue performance and rigid spending structures heighten the government’s reliance on borrowing.

In its mid-year fiscal assessment, the firm said the budget is running largely on momentum rather than adjustment, with revenues falling short of projections while recurrent expenditure and debt obligations continue to rise almost automatically.

Cowry Asset noted that aggregate federal government revenue for 2025 was projected at N48.97 trillion, with a half-year target of N24.48 trillion, but actual collections by mid-year stood at approximately N20.44 trillion, leaving a shortfall of about N4 trillion.

The analysts said the revenue gap is shaping the broader fiscal narrative, as weaker inflows limit the government’s ability to meet obligations without increased borrowing.

Independent revenue, expected to generate N7.99 trillion for the full year and N3.99 trillion in the first half, delivered about N3.58 trillion by mid-year, reinforcing persistent underperformance. Oil revenue also offered limited relief, coming in at roughly N2.94 trillion, slightly below the half-year benchmark of N3.04 trillion.

Expenditure trends, however, told a contrasting story. Total spending was approved at N34.35 trillion for the year, with a half-year benchmark of N17.18 trillion, while actual expenditure reached about N16.22 trillion by mid-year.

Cowry Asset stressed that this apparent moderation reflects structural rigidity rather than deliberate restraint. Recurrent non-debt expenditure was budgeted at N13.99 trillion for the year, with N6.99 trillion allocated for the first half, while actual spending reached N6.23 trillion.

Personnel costs illustrated the inflexibility, with N1.9 trillion spent by mid-year against a half-year benchmark of N2.04 trillion, while pension costs rose to about N1.42 trillion, close to the half-year provision of N1.72 trillion.

Debt service remained the most acute pressure point. From a full-year budget of N8.25 trillion and a half-year target of N4.12 trillion, actual debt service payments climbed to approximately N4.73 trillion by mid-year, exceeding projections.