The Federal Government exceeded its 2024 borrowing target by N4.79 trillion, with total new borrowings rising to N12.62 trillion against the budgeted N7.83 trillion, according to the latest Budget Office of the Federation Fourth Quarter and Consolidated Budget Implementation Report for 2024.
The report, first published by Punch Newspapers, attributed the increase to a larger-than-expected fiscal deficit caused by weaker government revenue despite expenditure remaining largely within budget.
The Budget Office said the fiscal deficit widened to N13.51 trillion, exceeding the approved N9.18 trillion by 47.3 per cent. Federal Government revenue reached N20.98 trillion, falling N4.9 trillion short of the budget estimate of N25.88 trillion, while total expenditure stood at N34.49 trillion, only N561.29 billion below the approved spending plan.
Domestic borrowing remained on target at N6.06 trillion, but foreign borrowing increased from the budgeted N1.77 trillion to N3.37 trillion. The government also received N3.19 trillion in budget support, despite making no provision for it in the 2024 budget. The source of the budget support was not disclosed.
The report showed that new borrowings financed about 36 per cent of the Federal Government’s 2024 budget, underscoring Nigeria’s continued reliance on debt to fund public spending.
Oil revenue underperformed, with gross oil receipts of N15.07 trillion, falling N4.93 trillion below the budget estimate. The Budget Office attributed this to lower average crude oil prices of $74.65 per barrel, compared with the benchmark of $77.96, and average daily production of 1.54 million barrels, below the projected 1.78 million barrels.
In contrast, non-oil revenue outperformed expectations, generating N16.09 trillion, exceeding the annual estimate by N5.29 trillion. The stronger performance was driven by higher collections from Company Income Tax, Value Added Tax, Electronic Money Transfer Levy, and Customs revenue.
Debt servicing also increased sharply during the year. The government spent N12.36 trillion on debt obligations, exceeding the budgeted N8.27 trillion by 52.7 per cent.
The report further revealed that Nigeria’s total public debt rose to N144.67 trillion by the end of December 2024, with the debt-to-GDP ratio reaching 61.22 per cent, above both Nigeria’s self-imposed threshold of 40 per cent and the 56 per cent benchmark for comparable economies.
On capital projects, the Federal Government released N5.81 trillion to Ministries, Departments and Agencies, but utilisation remained below expectations, with N3.27 trillion spent on projects.
Development economist Aliyu Ilias, Chief Executive Officer of CSA Advisory, warned that rising borrowing could increase inflationary pressures and worsen the cost of living if the funds are not effectively managed. He argued that the main issue is ensuring borrowed funds are invested in productive sectors that generate long-term economic returns.
Similarly, Dr Olusegun Omisakin, Chief Economist and Director of Research at the Nigerian Economic Summit Group, said borrowing itself is not necessarily the problem, but stressed that concerns centre on how the funds are utilised. He argued that investments in infrastructure and other productive assets would justify higher debt levels.
The Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, called for stronger fiscal discipline and improved revenue generation to reduce Nigeria’s dependence on borrowing.
The report comes amid renewed debate over the Federal Government’s borrowing strategy. The Emir of Kano, Muhammadu Sanusi II, recently questioned continued borrowing despite the removal of petrol subsidies, while the Presidency defended the loans as necessary for critical infrastructure development.
Finance Minister Taiwo Oyedele has also maintained that borrowing should be assessed based on its purpose, cost, expected returns and repayment terms, while reiterating that Nigeria must gradually move away from relying primarily on debt to finance development.
