KEY POINTS

• Nigeria ran a 4.69 trillion naira fiscal deficit in the first quarter of 2026.
• Revenue reached 5.08 trillion naira, about 55% of the quarterly target.
• The economy still grew 3.89%, led by the non-oil sector.

Nigeria’s federal government ran a fiscal deficit of 4.69 trillion naira in the first quarter of 2026 as revenue fell well short of target, according to the Budget Office of the Federation, Vanguard reported.

The deficit was 3.18 trillion naira below the prorated target of 7.86 trillion naira for January to March, the office’s 2026 budget performance report showed. But that smaller gap came as spending fell even further below plan than revenue did.

Revenue reached 5.08 trillion naira, against a quarterly target of 9.22 trillion naira. That left a shortfall of 4.14 trillion naira, or about 55% of projections. Meanwhile, spending came to 9.76 trillion naira, compared with the planned 17.08 trillion naira, about 57.2% of target.

Fiscal deficit financing falls short

Borrowing also lagged. Domestic borrowing totaled 3.9 trillion naira, against a target of 4.61 trillion naira, leaving a gap of 704.03 billion naira.

However, foreign borrowing, projected at 2.70 trillion naira for the quarter, brought in nothing. Project-tied loans from multilateral and bilateral lenders yielded 287.44 billion naira against a target of 512.23 billion naira, while privatization proceeds reached just 3.32 billion naira, far below the projected 47.29 billion naira.

Economy grows 3.89% despite the gaps

Still, the economy expanded 3.89% in real terms during the quarter. The non-oil sector grew 3.94%, outpacing the oil sector’s 2.57%, which was up from 1.87% a year earlier.

The Budget Office described the period as one of macroeconomic stabilization with moderate real-sector growth. However, it called weak, though improving, revenue a major constraint on budget execution, while noting that the government continued to meet its non-discretionary spending obligations.

The office said the central challenge for the rest of 2026 is to “convert stability into higher productive capacity” and stronger domestic revenue. So it plans to push oil production recovery, widen the tax base, improve compliance and rein in recurrent costs, particularly personnel spending.