The Federal Government exceeded its 2024 borrowing target by N4.79 trillion after a larger-than-expected budget deficit forced it to seek additional financing, according to the Budget Office of the Federation.
The Fourth Quarter and Consolidated Budget Implementation Report for 2024 showed that total new borrowings rose to N12.62 trillion, surpassing the approved borrowing target of N7.83 trillion by N4.79 trillion, representing an increase of 61.2 per cent. The increase followed a significant revenue shortfall that pushed the fiscal deficit to N13.51 trillion, well above the budgeted N9.18 trillion.
According to the report, the Federal Government generated N20.98 trillion in revenue during the year, falling N4.90 trillion short of the projected N25.88 trillion. Meanwhile, total expenditure reached N34.49 trillion, just N561.29 billion below the approved spending estimate of N35.06 trillion, indicating that the wider deficit resulted primarily from weaker revenue rather than excessive spending.
While domestic borrowing remained on target at N6.06 trillion, foreign borrowing climbed from the budgeted N1.77 trillion to N3.37 trillion, exceeding projections by N1.60 trillion. In addition, the Federal Government received N3.19 trillion in budget support, despite making no provision for it in the 2024 budget. Combined, domestic borrowing, foreign borrowing and budget support raised total new borrowings to N12.62 trillion.
The report further revealed that new borrowings financed approximately 36 per cent of the 2024 budget, underlining the government’s continued reliance on debt to fund public expenditure. It also noted that expected privatisation proceeds of N298.49 billion were not realised during the fiscal year.
Although total revenue increased by 68.11 per cent from N12.48 trillion in 2023 to N20.98 trillion in 2024, it still fell nearly 19 per cent below the annual target. Oil revenue remained the weakest performer, with gross earnings of N15.07 trillion, about N4.93 trillion below budget. The shortfall was attributed to lower-than-expected crude oil prices and production levels.
Non-oil revenue, however, outperformed expectations. Gross non-oil revenue reached N16.09 trillion, exceeding the budget estimate by N5.29 trillion, driven by stronger collections from Company Income Tax, Value Added Tax, the Electronic Money Transfer Levy and Customs revenue.
On expenditure, non-debt recurrent spending stood at N8.53 trillion, below budget, while debt servicing costs surged. Total debt expenditure rose to N12.36 trillion, exceeding the budgeted N8.27 trillion by 52.71 per cent, reflecting the growing cost of servicing Nigeria’s debt obligations.
The report also showed that N5.81 trillion was released for capital projects during the year, but utilisation lagged behind. As of June 30, 2025, Ministries, Departments and Agencies had utilised N3.27 trillion, representing 81.91 per cent of the funds released and cash-backed.
Nigeria’s debt burden also continued to rise. Total public debt increased to N144.67 trillion by the end of December 2024, pushing the debt-to-GDP ratio to 61.22 per cent well above Nigeria’s self-imposed threshold of 40 per cent and the international benchmark of 56 per cent for comparable economies.
Despite the fiscal challenges, the Budget Office expressed confidence that ongoing reforms aimed at improving tax administration, boosting non-oil revenue, reducing leakages and strengthening remittances from government-owned enterprises would reduce the country’s dependence on borrowing over the medium term.
Reacting to the report, Chief Executive Officer of CSA Advisory, Aliyu Ilias, warned that the sharp rise in borrowing could worsen inflation and increase the cost of living if not properly managed. He argued that while borrowing can support economic growth, the real concern is ensuring that borrowed funds are invested productively.
Similarly, Chief Economist of the Nigerian Economic Summit Group, Dr Olusegun Omisakin, maintained that borrowing itself is not the problem but rather how the funds are utilised. He said Nigeria’s debt indicators remain manageable compared to many economies, provided borrowed funds are channelled into projects that deliver tangible economic returns.
Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, also urged the government to curb the growth of public debt through stronger revenue generation and greater fiscal discipline. He noted that ongoing tax reforms could help ease the country’s reliance on borrowing if effectively implemented.
The issue has also sparked public debate. Former Central Bank Governor Muhammadu Sanusi II recently questioned the government’s continued borrowing despite the removal of fuel subsidy, warning that weak fiscal discipline could undermine the benefits of ongoing reforms. The Presidency defended the borrowing strategy, insisting it is intended to finance critical infrastructure, while Finance Minister Taiwo Oyedele argued that the focus should be on the purpose, cost and expected returns of borrowing rather than the size of the debt alone. He, however, acknowledged that Nigeria must ultimately build a more sustainable fiscal system that relies less on borrowing to fund development.