A staggering 91 percent of Nigeria’s government revenue was swallowed by debt servicing in the first quarter of 2026 as total revenue generated in the period stood at N5.08 trillion, against a budgeted target of N9.22 trillion, while debt servicing obligations gulped N4.63 trillion. BusinessDay’s analysis of the first quarter budget implementation report has revealed.

The report which was published by the Budget office of the federation showed that domestic debt service payment was above the quarterly budget estimate of N2.54 trillion by N598.68 billion (23.57 percent) during the period, as actual domestic debt service was N3.14 trillion during the quarter under review.

Also, the prorate sum of N1.34 trillion was planned for external debt service in the first quarter of 2026, but the actual external debt service payment however amounted to N1.4930 trillion indicating an increase of N148.95 billion (11.12 percent) from the quarterly projection.

However, the federal government failed to meet its revenue target in the quarter.

Based on the 2026 budget framework, the sum of N36.87 trillion was projected an inflow to fund the Federal Budget, indicating a quarterly share of N9.22 trillion.

Of this amount, only N5.08 trillion was received in the first quarter of 2026 reflecting a N4.14 trillion (44.93 percent) shortfall from the quarterly projection. It was however N0.13 trillion (2.63 percent) higher than the N4.95
trillion generated in the first quarter of 2025.

A breakdown of the revenue sources showed that the sum of N1.23 trillion that was received from oil sector, representing over 65 percent decline from the quarterly estimate of N3.51 trillion.

“A breakdown of the oil revenue performance in the first quarter of 2026 shows that only Miscellaneous (Pipeline fees etc.) of N10.34 billion exceeded the quarterly budget estimates of N1.54 billion by N8.80 billion (571.82 percent).

“All other oil revenue items performed below their quarterly budget projections. Crude Oil & Gas Sales of N180.05 billion, Petroleum Profit and Gas Taxes of N1.34 trillion, Royalties (Oil & Gas) of N1.53 trillion, Concessional Rentals of N6.22 billion and Incidental Oil Revenue (Royalty
Recovery & Marginal Field) of N7.78 billion fell below their quarterly estimate of N585.22 billion, N5.98 trillion, N2.71 trillion, N9.72 billion and N41.00 billion.

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“On the other hand, Gas Flared Penalty which had zero projection, yielded N115.48 billion respectively during the quarter,” the report stated.

It indicated that the actual net oil revenue that accrued into the Federation Account in the period was N2.53 trillion, depicting a decrease of N5.46 trillion (68.31 percent) from the prorated quarterly budget estimate of N8.00 trillion.

The poor net oil revenue performance according to the budget office could be attributed to the lower than projected crude oil revenue outturn, fall in production and lifting as well as poor industry investments in the near past.

On non-oil revenue side, a total of N4.91 trillion gross federally collected non-oil revenue was generated in the first quarter of 2026, indicating a decrease of N2.35 trillion (32.34 percent) from the quarterly estimate of N7.26 trillion.

FGN’s share of minerals & mining in the period stood at N6.56 billion, company income tax was N657.46 billion, VAT was N314.56 billion, Customs revenue stood at N368.94 billion. Total Federation Account Levies in the period was N21.61 billion and Independent Revenue of N558.30 billion. All these were below their corresponding quarterly budget estimates of N8.97 billion, N1.27 trillion, N322.89 billion, N518.01 billion, N102.12 billion and N1.30 trillion respectively.

Also, a total of N1.25 trillion was realised as GOEs Retained Revenue in the first quarter of 2026 which was (100.0 percent) of the quarterly projection. Signature Bonus and Nigerian Police Trust Funds (NPTF) Levy which had zero projection, yielded N7.77 billion and N0.05 billion in the review period.

On the other hand, Electronics Money Transfer (Stamp Duties) of N19.65 billion and Education Tax (TETFUND) of N405.73 billion were above their corresponding quarterly estimate of N15.96 billion and N237.44 billion by N3.69 billion (23.11 percent) and N168.29 billion (70.88 percent).

No inflow was recorded under FGN’s share of dividend, share of oil price royalty, draw down from special levies accounts and domestic recoveries during the quarter.

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On expenditure, a total of N68.32 trillion was appropriated for expenditure in the 2026 Budget, which translates to prorated quarterly expenditure outlay of N17.08 trillion in 2026.

However, actual expenditure outflow of N9.76 trillion was recorded in the first quarter of 2026, representing a decrease of N7.32 trillion (42.85 percent) over the quarterly budget projection for the year.

Of the total expenditure in the quarter, a total of N1.69 trillion was released as capital expenditure in the first quarter of 2026 which was approximately N6.38 trillion (79.06 percent) below the N8.07 trillion prorated Q1 budget.

N2.77 trillion was spent on non-debt recurrent expenditure in the first quarter of 2026, representing a shortfall of N1.09 trillion (28.26 percent) from the quarterly estimate of N3.86 trillion.

“Total Recurrent Debt expenditure in the first quarter of 2026 stood at N4.66 trillion representing an increase of N707.73 billion (17.91 percent) above the N3.95 trillion prorate projection for the quarter. Domestic debt service payment was above the quarterly budget estimate of N2.54 trillion by N598.68 billion (23.57 percent) during the period.

“Actual domestic debt service was N3.14 trillion during the quarter under review. The prorate sum of N1.34 trillion was planned for external debt service in the first quarter of
2026. Actual external debt service payment however amounted to N1.49trillion indicating an increase of N148.95 billion (11.12 percent) from the quarterly projection.”

The sum of N8.35 trillion was appropriated for MDAs Personnel Cost in the 2026 Budget. This translates to prorated quarterly expenditure outlay of
N2.09 trillion in 2026.

Also, actual MDAs and personnel cost in the period was N1.70 trillion, translating to N385.78 billion (18.47 percent) below N2.09 trillion quarterly projection for the year. A total of N183.52 billion was released as overhead cost in the period, which was N130.14 billion (41.49 percent) below the quarterly projection of N313.66 billion. Also, a total N1.25 trillion was allocated to overhead spending in the 2026 Budget.

“A total of N644.87 billion was released as Statutory Transfers in the first quarter of 2026 which was (46.26 percent) below quarterly projection. It is important to note that quarterly releases to beneficiaries under this subhead
are determined by budgetary provisions, needs and availability of funds.

“Government’s available financial resources were also directed at structural reform of the economy and the provision of critical infrastructure in the roads, power, housing, rail and aviation sectors as well as the provision of physical and food security.

“In view of this, a total of N32.29 trillion (including MDAs/GOEs capital expenditure, Multilateral/bilateral Project-tied loans and grant- and donor-funded projects) was allocated to capital spending in the 2026 Budget.