The Federal Government exceeded its 2024 borrowing target by N4.79tn after a wider-than-expected budget deficit forced it to raise significantly more debt than originally planned, according to the Budget Office of the Federation.
The Budget Office’s Fourth Quarter and Consolidated Budget Implementation Report for 2024 showed that new borrowings rose to N12.62tn, exceeding the approved borrowing plan of N7.83tn by N4.79tn, representing an increase of 61.2 per cent.
The report attributed the higher borrowing requirement to a major revenue shortfall, which widened the fiscal deficit to N13.51tn, well above the budgeted deficit of N9.18tn.
Federal Government revenue for the year stood at N20.98tn, falling short of the N25.88tn target by N4.90tn, while total expenditure reached N34.49tn, only N561.29bn below the approved budget of N35.06tn. The figures indicate that the larger fiscal gap resulted mainly from weaker revenue performance rather than excessive spending.
“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,” the report stated.
The Budget Office also noted that the deficit exceeded the N10.55tn recorded in 2023, reflecting increasing pressure on the country’s public finances.
An analysis of the financing profile showed that domestic borrowing remained in line with the approved target at N6.06tn. However, foreign borrowing rose from the budgeted N1.77tn to N3.37tn, exceeding the target by N1.60tn.
In addition, the Federal Government received N3.19tn in budget support, despite making no provision for such financing in the 2024 budget. The report classified the budget support as new borrowing but did not disclose its source.
Combined with domestic and foreign borrowings, the budget support raised total new borrowing to N12.62tn, representing about 36 per cent of total Federal Government expenditure in 2024.
The report further showed that multilateral and bilateral project-tied loans reached N1.98tn, compared with the budget estimate of N1.05tn, while expected privatisation proceeds of N298.49bn failed to materialise.
According to the report, the fiscal deficit was financed through N1.98tn in multilateral and bilateral project loans, N6.06tn in domestic borrowing, N3.37tn in foreign borrowing and N3.19tn in budget support.
Despite missing its overall revenue target, the government recorded strong growth in non-oil revenue. Gross non-oil revenue rose to N16.09tn, exceeding the budget estimate of N10.81tn by N5.29tn, driven largely by higher collections from Company Income Tax, Value Added Tax, Electronic Money Transfer Levy and Customs revenue.
Oil revenue, however, underperformed significantly. Gross oil revenue stood at N15.07tn, falling N4.93tn below the budget estimate of N19.99tn due to lower crude oil prices and reduced production.
The report showed that international crude oil prices averaged $74.65 per barrel during the fourth quarter, below the budget benchmark of $77.96, while average daily crude oil production stood at 1.54 million barrels per day, compared with the projected 1.78 million barrels per day.
Government spending remained broadly aligned with the approved budget, with total expenditure amounting to N34.49tn, only 1.6 per cent below the budget estimate. Compared with 2023, however, total expenditure increased by N11.45tn or 49.7 per cent.
The report also highlighted rising debt service obligations, with debt expenditure reaching N12.36tn, exceeding the budget estimate of N8.27tn by 52.71 per cent.
“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,” the report stated.
On capital projects, the Budget Office disclosed that N5.81tn was released and cash-backed for Ministries, Departments and Agencies in 2024. However, only N3.27tn, representing 81.91 per cent of the released funds, had been utilised as of June 30, 2025.
The report further revealed that Nigeria’s total public debt rose to N144.67tn by the end of December 2024, pushing the debt-to-GDP ratio to 61.22 per cent, above Nigeria’s self-imposed threshold of 40 per cent and the international benchmark of 56 per cent for comparable economies.
Despite the deteriorating fiscal position, the Budget Office expressed optimism that ongoing reforms to strengthen tax administration, improve non-oil revenue collection, review fiscal incentives, plug revenue leakages and enhance remittances from government-owned enterprises would reduce reliance on borrowing and improve fiscal sustainability over the medium term.
Economic analysts, however, expressed concern over the growing debt profile.
Chief Executive Officer of CSA Advisory, Aliyu Ilias, warned that the sharp increase in borrowing could worsen inflationary pressures and increase the cost of living if not effectively managed.
He noted that while borrowing can support economic growth when invested in productive sectors, Nigeria’s rising debt service obligations remain a major concern.
Similarly, Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, called for stronger fiscal discipline and improved revenue mobilisation to reduce the country’s dependence on borrowing.
The debate over Nigeria’s rising debt burden has also drawn comments from the Emir of Kano, Muhammadu Sanusi II, the Presidency and the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, who have maintained differing positions on the sustainability and purpose of government borrowing.
