The Federal Government exceeded its 2024 borrowing target by N4.79 trillion after a larger-than-expected budget deficit forced it to secure more financing 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 N12.62 trillion, surpassing the budgeted N7.83 trillion by 61.2 percent.
The report attributed the higher borrowing to a significant revenue shortfall, which widened the fiscal deficit to N13.51 trillion, above the approved deficit of N9.18 trillion.
Federal Government revenue stood at N20.98 trillion, falling N4.90 trillion short of the budget estimate of N25.88 trillion.
Meanwhile, total expenditure reached N34.49 trillion, only N561.29 billion below the approved budget of N35.06 trillion, indicating that the wider deficit was largely driven by lower-than-expected revenue rather than increased spending.
According to the report, the fiscal deficit exceeded projections by N4.34 trillion, representing a 47.33 percent increase above the approved estimate. It also surpassed the N10.55 trillion deficit recorded in 2023.
Domestic borrowing remained on target at N6.06 trillion, while foreign borrowing increased significantly to N3.37 trillion, exceeding the budgeted N1.77 trillion by N1.60 trillion.
The report also disclosed that the Federal Government received N3.19 trillion in budget support, despite making no provision for such financing in the 2024 budget. The source of the budget support was not disclosed.
Combined with domestic and foreign borrowing, the budget support raised total new borrowings to N12.62 trillion, financing about 36 percent of the Federal Government’s 2024 budget.
In addition, multilateral and bilateral project-tied loans amounted to N1.98 trillion, exceeding the budget estimate of N1.05 trillion by N929.45 billion.
The report further revealed that the government failed to realise the projected N298.49 billion from privatisation proceeds during the fiscal year.
Although total government revenue increased by 68.11 percent from N12.48 trillion in 2023 to N20.98 trillion in 2024, it remained 18.92 percent below the annual target.
Oil revenue remained the weakest component of government earnings. Gross oil revenue stood at N15.07 trillion, falling N4.93 trillion short of the budget estimate of N19.99 trillion.
The Budget Office attributed the shortfall to lower international crude oil prices and weaker production levels. Average crude oil prices stood at $74.65 per barrel during the fourth quarter, below the budget benchmark of $77.96, while daily crude oil production averaged 1.54 million barrels, compared to the projected 1.78 million barrels per day.
Despite the decline in oil earnings, non-oil revenue outperformed expectations. Gross non-oil revenue reached N16.09 trillion, exceeding the annual target of N10.81 trillion by 48.91 percent.
The stronger performance was driven by improved collections from Company Income Tax, Value Added Tax, Electronic Money Transfer Levy, and Customs revenue.
Debt servicing also placed additional pressure on public finances. Total debt expenditure rose to N12.36 trillion, exceeding the budgeted N8.27 trillion by 52.71 percent.
Capital project implementation remained below expectations despite funding releases. The report showed that N5.81 trillion was released and cash-backed for capital projects, but Ministries, Departments and Agencies had utilised only N3.27 trillion, representing 81.91 percent of the released funds as of June 30, 2025.
The Budget Office also disclosed that Nigeria’s total public debt increased to N144.67 trillion at the end of December 2024, pushing the debt-to-GDP ratio to 61.22 percent.
It warned that the figure exceeds Nigeria’s self-imposed threshold of 40 percent as well as the international benchmark of 56 percent for comparable economies.
Despite the fiscal challenges, the Budget Office said ongoing reforms to improve tax administration, strengthen non-oil revenue collection, reduce revenue leakages, and enhance remittances from government-owned enterprises are expected to reduce reliance on borrowing over the medium term.
Economic experts, however, expressed mixed views on the rising debt profile.
Chief Executive Officer of CSA Advisory, Aliyu Ilias, warned that excessive borrowing could worsen inflation, increase debt servicing costs, and deepen the cost-of-living crisis if not properly managed.
Similarly, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, urged the government to ensure debt remains sustainable by strengthening revenue generation and fiscal discipline.
On the other hand, the Chief Economist of the Nigerian Economic Summit Group, Dr. Olusegun Omisakin, argued that the focus should not be on the volume of borrowing alone but on whether the borrowed funds are invested in productive projects capable of generating long-term economic returns.
