The Federal Government surpassed its 2024 borrowing target by N4.79 trillion, primarily due to revenue shortfalls which widened the budget deficit, as reported by the Budget Office of the Federation.
According to the Fourth Quarter and Consolidated Budget Implementation Report for 2024, total new borrowing reached N12.62 trillion, significantly exceeding the approved estimate of N7.83 trillion by 61.2 percent. This rise in borrowing arose mainly from a growing fiscal deficit triggered by underperformance in revenue. The government’s revenue collection for the year was N20.98 trillion, falling short of the budget target of N25.88 trillion by N4.90 trillion.
Total government spending was N34.49 trillion, slightly under the approved expenditure of N35.06 trillion by N561.29 billion, suggesting that the fiscal gap was more a result of reduced revenue rather than excessive spending.
Consequently, the Federal Government ended up with a fiscal deficit of N13.51 trillion, surpassing the approved deficit of N9.18 trillion by N4.34 trillion (47.33 percent). This deficit outstripped the N10.55 trillion observed in 2023, emphasizing mounting pressures on national finances.
The financing profile indicated that domestic borrowing stayed within approved limits at N6.06 trillion. However, foreign borrowing surged past projections from N1.77 trillion to N3.37 trillion. Additionally, the government secured N3.19 trillion in budget support despite it not being budgeted for in 2024. The source of this budget support, classified as new borrowing, was not detailed in the report.
In total, domestic borrowing, foreign loans, and budget support escalated new debt to N12.62 trillion, well beyond the approved borrowing plan. The report highlighted that new borrowings covered about 36 percent of the Federal Government’s 2024 budget, illustrating Nigeria’s persistent dependency on debt to fulfill fiscal responsibilities.
Moreover, multilateral and bilateral project-tied loans increased to N1.98 trillion, outpacing the budgeted figure of N1.05 trillion by N929.45 billion.
The report further noted that the Federal Government did not meet its expected revenue from privatisation proceeds, amounting to an unrealised N298.49 billion for the fiscal year.
These developments have rekindled concerns among economists and fiscal policy experts regarding Nigeria’s rising debt load, with many advocating for enhanced revenue generation, improved tax administration, and prudent public expenditure to decrease reliance on debt while ensuring sustainable economic growth.
The Budget Office outlined that the Federal Government financed the N13.51 trillion fiscal deficit through various sources including multilateral and bilateral project-tied loans, domestic borrowing, foreign loans, and budget support.
Specifically, N1.98 trillion was obtained through multilateral and bilateral project-tied loans, N6.06 trillion from the domestic market, and foreign borrowing accounted for N3.37 trillion. An additional N3.19 trillion was received as budget support during the fiscal period.
The Budget Office attributed the expanding financing gap predominantly to revenue shortfalls despite an improvement in government earnings compared to the previous year.
The report highlighted that Federal Government revenue in Nigeria rose to N20.98 trillion in 2024, marking a significant increase of N8.50 trillion or 68.11 percent** compared to the N12.48 trillion collected in 2023. Despite this growth, the revenue was still **N4.89 trillion** or **18.92 percent** short of the targeted budget figure.
Oil revenue continued to be the weakest link in government earnings, with gross oil receipts totaling N15.07 trillion, which was N4.93 trillion below the projected N19.99 trillion. This shortfall was due to lower-than-expected international crude oil prices and decreased production levels, as average crude prices in the fourth quarter were $74.65 per barrel, falling short of the budget benchmark of $77.96, while daily production averaged 1.54 million barrels per day, against the expected **1.78 million barrels per day**.
Contrastingly, non-oil revenue exceeded expectations, with gross non-oil collections reaching **N16.09 trillion**, surpassing the budget estimate of N10.81 trillion by N5.29 trillion, an increase of 48.91 percent. This stronger performance was mainly driven by enhanced collections from Company Income Tax (CIT), Value Added Tax (VAT), the Electronic Money Transfer Levy (EMTL), and Nigeria Customs Service revenues.
In terms of expenditure, government spending was mostly within budget, totaling N34.49 trillion, which was only N561.29 billion below the approved estimate of N35.06 trillion. However, spending rose by N11.45 trillion**, or 49.7 percent**, compared to 2023, reflecting increased costs in governance and debt obligations.
The report also noted that non-debt recurrent expenditure amounted to **N8.53 trillion**, which was under the budgeted N11.27 trillion. In contrast, debt servicing costs saw a substantial increase throughout the year. Total debt service expenditure reached N12.36 trillion, exceeding the budgeted N8.27 trillion by 52.71 percent**, highlighting the growing burden of servicing Nigeria’s increasing public debt.
Capital spending faced constraints due to rising fiscal pressures, with N5.81 trillion allocated for capital projects in 2024, underscoring efforts to maintain infrastructure development amid financing challenges.
Economists are worried about Nigeria’s growing debt profile, stressing the importance of stronger revenue mobilization, better oil production, fiscal discipline, and sustained economic reforms to lessen reliance on borrowing while aiming for long-term fiscal stability.
Despite releasing and cash-backing ₦5.81 trillion** for capital projects in 2024, actual utilization by Ministries, Departments, and Agencies (MDAs) was below expectations. By June 30, 2025, MDAs had used ₦3.27 trillion**, or **81.91 percent**, of these funds, leaving a considerable portion of approved capital allocations unspent.
The report also highlighted concerns over Nigeria’s increasing public debt, which grew to ₦144.67 trillion by December 2024, raising the country’s debt-to-GDP ratio to 61.22 percent**. This figure surpasses both Nigeria’s self-imposed debt threshold of 40 percent** and the **56 percent** benchmark for similar emerging economies, indicating escalating fiscal pressure.
Despite these challenges, the Budget Office expressed optimism that ongoing reforms would gradually improve government finances by strengthening tax administration, expanding non-oil revenue, reviewing fiscal incentives, blocking revenue leakages, and enhancing remittances from government-owned enterprises to reduce borrowing dependence over the medium term.
Reacting to the report, development economist Aliyu Ilias emphasized that while borrowing can foster economic growth if invested wisely, Nigeria’s growing debt servicing obligations are becoming cumbersome. He cautioned that injecting borrowed funds without corresponding productivity increases could raise the money supply and fuel inflation, exacerbating living costs for households.
Ilias asserted that the critical issue is not borrowing per se but rather whether borrowed funds are efficiently utilized in projects that yield economic returns.
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