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FG Exceeds 2024 Borrowing Target by N4.79tn as Revenue Shortfall Deepens Fiscal Deficit
The Federal Government exceeded its 2024 borrowing target by N4.79 trillion, following a wider-than-expected budget deficit triggered by a significant revenue shortfall, according to the Budget Office of the Federation’s Fourth Quarter and Consolidated Budget Implementation Report for 2024.
The report revealed that the government raised N12.62 trillion in new borrowings during the year, surpassing the budgeted N7.83 trillion by 61.2 per cent. The increase came as total government revenue fell short of projections, widening the fiscal deficit to N13.51 trillion, against the approved N9.18 trillion.
Federal Government revenue stood at N20.98 trillion, missing the budget target of N25.88 trillion by N4.90 trillion. Meanwhile, total expenditure reached N34.49 trillion, only N561.29 billion below the approved estimate of N35.06 trillion, indicating that the widening fiscal gap was largely driven by weaker revenue performance rather than overspending.
According to the Budget Office, the 2024 fiscal deficit exceeded projections by N4.34 trillion, representing a 47.33 per cent increase over the approved estimate. The deficit also surpassed the N10.55 trillionrecorded in 2023, highlighting mounting pressure on Nigeria’s public finances.
A breakdown of the government’s financing profile showed that domestic borrowing remained on target at N6.06 trillion, while foreign borrowing rose 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 support, classified as new borrowing, was not identified.
Combined with domestic and foreign loans, total new borrowings climbed to N12.62 trillion, financing approximately 36 per cent of the 2024 federal budget.
In addition, multilateral and bilateral project-tied loans amounted to N1.98 trillion, significantly above the budget estimate of N1.05 trillion, while the projected N298.49 billion from privatisation failed to materialise.
The Budget Office attributed the wider fiscal deficit primarily to revenue underperformance. Although total government revenue increased by 68.11 per cent from N12.48 trillion in 2023, it remained 18.92 per centbelow the budget 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 N19.99 trillion target. The report attributed the decline to lower international crude oil prices, which averaged $74.65 per barrel against the benchmark of $77.96, and lower crude oil production of 1.54 million barrels per day, below the projected 1.78 million barrels per day.
In contrast, non-oil revenue outperformed expectations, reaching N16.09 trillion, exceeding the annual target of N10.81 trillion by 48.91 per cent. The improvement was driven by stronger collections from Company Income Tax, Value Added Tax, Electronic Money Transfer Levy, and Customs revenue.
Despite the revenue gap, government spending remained broadly in line with the approved budget. Total expenditure increased by 49.7 per cent from N23.04 trillion recorded in 2023 to N34.49 trillion in 2024.
However, debt servicing costs rose sharply. The report showed that N12.36 trillion was spent on debt servicing during the year, exceeding the budgeted N8.27 trillion by 52.71 per cent.
Capital expenditure also faced implementation challenges. Although N5.81 trillion was released and cash-backed for capital projects, only N3.27 trillion had been utilised by Ministries, Departments and Agencies as of June 30, 2025, representing 81.91 per cent of the released funds.
The report further highlighted Nigeria’s growing debt burden, with total public debt rising to N144.67 trillion as of December 2024. Consequently, the country’s debt-to-GDP ratio increased to 61.22 per cent, exceeding both Nigeria’s self-imposed threshold of 40 per cent and the 56 per cent benchmark for comparable economies.
Despite the deteriorating fiscal position, the Budget Office expressed optimism that ongoing reforms aimed at strengthening tax administration, improving non-oil revenue mobilisation, plugging revenue leakages, reviewing fiscal incentives, and enhancing remittances from government-owned enterprises would reduce dependence on borrowing and improve fiscal sustainability over the medium term.
Reacting to the report, development economist and Chief Executive Officer of CSA Advisory, Aliyu Ilias, warned that the sharp rise in borrowing poses significant macroeconomic risks, including higher inflation and increased cost-of-living pressures. He argued that while borrowing can support economic growth if invested productively, Nigeria’s rising debt servicing obligations make the current borrowing trend a source of concern.
Similarly, the Chief Economist and Director of Research at the Nigerian Economic Summit Group, Dr. Olusegun Omisakin, maintained that borrowing itself is not the problem but how the funds are utilised. According to him, debt becomes justifiable when channelled into infrastructure and productive investments capable of generating economic returns.
The Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, also urged the government to adopt measures that would curb the rapid growth of public debt through improved revenue generation and stronger fiscal discipline.
Punch reports that the borrowing debate has also sparked public exchanges between the Emir of Kano, Muhammadu Sanusi II, and the Presidency. Sanusi questioned the need for continued borrowing despite the removal of fuel subsidy, warning against fiscal indiscipline. In response, the Presidency defended the borrowing strategy, insisting that the loans are targeted at critical infrastructure projects.
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, also defended the government’s debt strategy, arguing that the focus should be on the purpose, cost, returns, and repayment terms of borrowed funds rather than the volume of debt alone. He, however, reiterated that Nigeria cannot continue to rely primarily on borrowing to finance development and must build a more sustainable fiscal framework capable of supporting infrastructure, healthcare, education, security, and social protection.