Nigeria’s Federal Government borrowed N12.62 trillion in 2024, exceeding its approved borrowing plan by N4.79 trillion, after a sharp revenue shortfall widened the country’s budget deficit, according to the latest Budget Office implementation report.
The Fourth Quarter and Consolidated Budget Implementation Report for 2024 revealed that the government had initially planned to borrow N7.83 trillion, but ended the year with new borrowings that were 61.2 per cent above target. The increase followed weaker-than-expected revenue, which pushed the fiscal deficit to N13.51 trillion, far above the approved deficit of N9.18 trillion.
The report showed that the Federal Government generated N20.98 trillion in revenue against a budget projection of N25.88 trillion, leaving a shortfall of nearly N4.9 trillion. Government spending, however, remained largely on track, with total expenditure reaching N34.49 trillion, only slightly below the approved budget of N35.06 trillion.
While domestic borrowing stayed within the planned N6.06 trillion, foreign borrowing rose significantly to N3.37 trillion, exceeding its target by N1.6 trillion. The government also received N3.19 trillion in budget support, despite making no provision for it in the 2024 budget. The Budget Office did not disclose the source of the funding.
Oil revenue remained the biggest challenge to government finances. Gross oil earnings stood at N15.07 trillion, falling N4.93 trillion short of expectations due to lower international crude prices and reduced daily oil production. However, non-oil revenue outperformed projections, reaching N16.09 trillion, driven by stronger collections from Company Income Tax, Value Added Tax, Customs duties and the Electronic Money Transfer Levy.
The report also highlighted a sharp increase in debt servicing costs. Total debt expenditure climbed to N12.36 trillion, exceeding the budgeted N8.27 trillion by more than 52 per cent. Meanwhile, Nigeria’s total public debt rose to N144.67 trillion, with the debt-to-GDP ratio increasing to 61.22 per cent, surpassing both Nigeria’s 40 per cent benchmark and the 56 per cent threshold for comparable economies.
Despite the growing debt burden, the Budget Office said ongoing reforms aimed at improving tax administration, boosting non-oil revenue, plugging leakages and increasing remittances from government-owned enterprises would reduce dependence on borrowing over time.
Economists remain divided on the borrowing trend. Chief Executive Officer of CSA Advisory, Aliyu Ilias, warned that rising debt could worsen inflation and increase the cost of living if borrowed funds are not properly managed. On the other hand, the Nigerian Economic Summit Group’s Chief Economist, Dr Olusegun Omisakin, argued that borrowing is not the core problem, stressing that the real issue is whether the loans are invested in projects that generate economic returns and improve infrastructure.
