The Federal Government exceeded its 2024 borrowing target by N4.79tn after a wider-than-projected budget deficit forced it to raise significantly more financing than originally planned, the Budget Office of the Federation has disclosed.
According to the latest Fourth Quarter and Consolidated Budget Implementation Report for 2024, the Federal Government’s new borrowings rose to N12.62tn, exceeding the budgeted N7.83tn by N4.79tn, or 61.2 per cent.
The higher borrowing requirement followed a substantial revenue shortfall, which pushed the fiscal deficit to N13.51tn, well above the approved deficit of N9.18tn.
The report showed that aggregate Federal Government revenue stood at N20.98tn, compared with the budget estimate of N25.88tn, representing a shortfall of N4.90tn.
Total expenditure, however, amounted to N34.49tn, only N561.29bn below the approved estimate of N35.06tn, indicating that the wider fiscal gap was driven primarily by weaker revenue rather than higher spending.
The report read, “The revenue and expenditure outturn of the Federal Government resulted in a fiscal deficit of N13.51tn in the 2024 fiscal year. This was N4.34tn (47.33 per cent) above the projected budget deficit estimate for the year.”
It added that the deficit also exceeded the N10.55tn recorded in 2023, showing the increasing pressure on the country’s public finances.
An analysis of the government’s financing profile showed that domestic borrowing remained exactly on target at N6.06tn, but higher foreign borrowing and budget support significantly increased overall borrowings.
Foreign borrowing rose from the budgeted N1.77tn to N3.37tn, representing an increase of N1.60tn above target.
Also, the Federal Government received N3.19tn in budget support, despite making no provision for such financing in the 2024 budget. The source of the budget support, which was classified as new borrowing, was not disclosed.
Together, domestic borrowing, foreign borrowing and budget support brought total new borrowings to N12.62tn, exceeding the approved borrowing programme by N4.79tn.
An analysis of the Budget Office report showed that new borrowings financed about 36 per cent of the Federal Government’s 2024 budget, highlighting the country’s continued dependence on debt to fund public expenditure.
Separate from the new borrowings, the report showed that multilateral and bilateral project-tied loans amounted to N1.98tn, compared with the budget estimate of N1.05tn, representing a positive variance of N929.45bn.
The report also showed that expected privatisation proceeds of N298.49bn did not materialise, as no revenue was realised from that source during the fiscal year.
According to the report, the fiscal deficit “was financed through multi-lateral/bilateral project-tied loans of N1.98tn, domestic borrowing of N6.06tn, foreign borrowing of N3.37tn and budget support of N3.19tn in the period under review.”
The report attributed the wider financing gap largely to revenue underperformance.
It stated that total Federal Government revenue stood at N20.98tn, representing an increase of N8.50tn, or 68.11 per cent, over the N12.48tn generated in 2023. However, revenue remained N4.89tn, or 18.92 per cent, below the annual budget target.
It stated, “Total Revenue Inflow of the Federal Government stood at N20.98tn at the end of December 2024. This represents an N8.50tn (68.11 per cent) increase when compared to N12.48tn that was reported at the end of 2023, but N4.89tn (18.92 per cent) lower than the 2024 annual budget estimate.”
Oil revenue remained the biggest source of weakness. Gross oil revenue amounted to N15.07tn, falling N4.93tn below the budget estimate of N19.99tn.
The report explained that international crude oil prices averaged $74.65 per barrel during the fourth quarter, below the budget benchmark of $77.96 per barrel. Average daily crude oil production also stood at 1.54 million barrels per day, well below the budget assumption of 1.78 million barrels per day.
Despite the weak oil performance, non-oil revenue exceeded expectations. The report showed that gross non-oil revenue reached N16.09tn, surpassing the annual estimate of N10.81tn by N5.29tn, or 48.91 per cent.
According to the report, the improved performance was driven mainly by stronger collections from Company Income Tax, Value Added Tax, Electronic Money Transfer Levy and Customs revenue.
Although revenue fell short of expectations, government expenditure remained broadly aligned with the approved budget.
Total expenditure stood at N34.49tn, only N561.29bn, or 1.6 per cent, below the budget estimate of N35.06tn.
Compared with 2023, however, expenditure increased by N11.45tn, or 49.7 per cent, from N23.04tn.
The report showed that non-debt recurrent expenditure amounted to N8.53tn, below the budget estimate of N11.27tn, while debt service obligations increased significantly during the year.
According to the report, total debt expenditure reached N12.36tn, exceeding the budgeted N8.27tn by 52.71 per cent.
It stated, “A total of N12.36tn was committed as total debt expenditure for the year, 52.71 per cent above the N8.27tn budgeted for the period.”
Amid mounting fiscal pressures, the Federal Government struggled to prioritise capital expenditure.
The report disclosed that N5.81tn was released and cash-backed for capital projects during the 2024 fiscal year.
However, utilisation remained below releases. According to the report, Ministries, Departments and Agencies had utilised N3.27tn, representing 81.91 per cent of the funds released and cash-backed as of June 30, 2025.
It stated, “A total of N5.81tn was released and cash-backed to MDAs for their 2024 capital projects and programmes in 2024 fiscal year. Available fiscal data revealed that only N3.27tn (81.91 per cent) of the total amount released and cash-backed was utilized by MDAs.”
The report also highlighted Nigeria’s rising debt burden.
It showed that total public debt rose to N144.67tn at the end of December 2024, with the debt-to-GDP ratio increasing to 61.22 per cent.
The Budget Office warned that the ratio had exceeded both Nigeria’s self-imposed threshold of 40 per cent and the international benchmark of 56 per cent for comparable economies.
It stated, “This translates to a net present value of total public debt/GDP ratio of 61.22 per cent as at the end of December, 2024. This is above the country’s threshold of 40 per cent and the international threshold of 56 per cent for comparator countries.”
Despite the weaker fiscal outcome, the Budget Office maintained that ongoing reforms aimed at strengthening tax administration, improving non-oil revenue mobilisation, reviewing fiscal incentives, plugging revenue leakages and improving remittances from government-owned enterprises would help reduce reliance on borrowing and improve fiscal sustainability over the medium term.
Commenting, the Chief Executive Officer of CSA Advisory and a development economist, Aliyu Ilias, said the sharp increase in borrowing raises serious macroeconomic concerns, warning that the scale of new debt could worsen inflation and cost-of-living pressures.
Speaking with The PUNCH, Ilias said that while borrowing could support growth if properly deployed, the risks currently outweigh the benefits, especially given Nigeria’s rising debt service burden.
“The fact is that it has negative and positive impacts. But the negative impact is that we already have issues of debt service. You look at our budget, about N15tn is needed to service debt, and now we’re incurring more,” he said.
According to him, increased borrowing could inject excess liquidity into the economy, fuelling inflationary pressures if not well managed.
“When you have more money in circulation, it depends on how we manage it. It can bring inflation, and when you have inflation, it will actually increase the cost of living,” he added.
He stressed that the key issue is not borrowing itself but how effectively the funds are utilised.
On alternatives to borrowing, the economist urged the government to focus on boosting oil output and strengthening trade performance.
However, he described the current borrowing trend as excessive, especially in light of earlier reforms aimed at increasing government revenue.
During a recent media chat, the Chief Economist and Director of Research at the Nigerian Economic Summit Group, Dr Olusegun Omisakin, said the issue is not borrowing itself but how the funds are utilised.
“Without justifying borrowing, if you look at contemporary economies, you hardly see a significant difference in terms of borrowing levels. Nigeria is still relatively okay when you look at debt-to-GDP and debt-to-revenue indicators,” he said.
He, however, stressed that the real concern is the use of borrowed funds, noting, “The challenge is what we use the money for. If Nigeria borrows and you see the impact on infrastructure, nobody will really be concerned about the rate of borrowing.”
A renowned economist and Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, said while borrowing may not be entirely avoidable, Nigeria must urgently rein in its rising debt profile and reduce reliance on loans through stronger revenue and fiscal discipline.
Yusuf said, “We need to work on the growth of our debt. We need to devise strategies to ensure that our debt levels are sustainable.”
He noted that recent tax reforms could play a critical role in easing borrowing pressures if properly implemented.
The Emir of Kano, Muhammadu Sanusi II, and the Presidency recently traded words over Nigeria’s rising debt burden, following renewed concerns by the monarch about continued borrowing by President Bola Tinubu’s administration.
Sanusi, a former Governor of the Central Bank of Nigeria, questioned the Federal Government’s growing reliance on loans despite the removal of petrol subsidy, warning that weak fiscal discipline could undermine the gains expected from the reforms.
“We’ve removed the subsidy. We’re now spending it. What we should not see is fiscal indiscipline. You cannot remove wastages and continue borrowing. If you’re not paying the subsidy and you’ve got the money, why are we still borrowing?” he asked during an interview on News Central TV.
Responding, the Presidency, through the Special Adviser on Policy Communication, Daniel Bwala, defended the borrowing plan, saying it was targeted at critical infrastructure development.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, recently faulted Nigerians, especially analysts and commentators, for attacking government borrowing without considering the purpose, cost and expected return on such debt.
He said, “When analysts go on TV and join the populist view to accuse the government of borrowing, you are doing a disservice. The relevant question is never simply how much debt. It is always debt for what and what cost, against what return, and repaid on what terms?
“A nation, a state, or a business that borrows to finance a productive asset generating returns above the cost of that capital is not behaving recklessly; it is behaving rationally.”
However, much earlier, the finance minister had said that Nigeria could no longer rely mainly on borrowing to fund development, warning that the country must build a sustainable fiscal system capable of supporting critical sectors of the economy.
“Nigeria cannot continue to finance development primarily through borrowing. We must build a fiscal system capable of sustainably supporting critical infrastructure, quality education, affordable healthcare, security, and social protection,” he said.
