The Federal Government borrowed far more than it originally planned in 2024 after revenue fell short of expectations, pushing the country’s fiscal deficit higher and increasing pressure on public finances.
A new budget implementation report released by the Budget Office of the Federation showed that the government raised a total of ₦12.62 trillion in fresh borrowing during the 2024 fiscal year.
The figure exceeded the approved borrowing target of ₦7.83 trillion by ₦4.79 trillion, representing an increase of about 61 per cent.
The report indicated that the larger borrowing requirement was driven by a widening budget deficit caused mainly by weaker-than-expected revenue performance.
According to the document, the Federal Government recorded a fiscal deficit of ₦13.51 trillion in 2024.
This was significantly higher than the approved deficit projection of ₦9.18 trillion and also exceeded the ₦10.55 trillion deficit recorded in 2023.
“The revenue and expenditure outturn of the Federal Government resulted in a fiscal deficit of ₦13.51tn in the 2024 fiscal year. This was ₦4.34tn (47.33 per cent) above the projected budget deficit estimate for the year,” the report stated.
Government revenue for the year stood at ₦20.98 trillion, falling short of the budget target of ₦25.88 trillion by nearly ₦4.9 trillion. While revenue underperformed, expenditure remained largely in line with projections.
The report showed that total spending reached ₦34.49 trillion, slightly below the approved estimate of ₦35.06 trillion. The figures suggest that the widening deficit was largely caused by lower revenue inflows rather than excessive spending.
A breakdown of the financing profile revealed that domestic borrowing remained within the approved limit. The government borrowed ₦6.06 trillion locally, matching the amount approved in the budget.
However, foreign borrowing rose sharply. While ₦1.77 trillion had been projected, actual foreign borrowing climbed to ₦3.37 trillion, exceeding the target by ₦1.6 trillion.
The report also disclosed that the government received ₦3.19 trillion in budget support during the year despite making no provision for such financing in the approved budget. The source of the support was not identified in the report.
Combined with domestic and foreign loans, the budget support pushed total new borrowing to ₦12.62 trillion.
Data contained in the report showed that fresh borrowing financed more than one-third of the 2024 budget, highlighting the government’s continued dependence on debt to fund public expenditure.
The report further revealed that project-tied multilateral and bilateral loans amounted to ₦1.98 trillion, exceeding the budget estimate of ₦1.05 trillion.
Expected proceeds from privatisation also failed to materialise. The government had projected ₦298.49 billion from asset sales, but no revenue was generated from that source during the fiscal year.
Revenue performance remained mixed across key sectors.
Oil earnings continued to underperform. Gross oil revenue stood at ₦15.07 trillion, falling ₦4.93 trillion below the budget estimate of ₦19.99 trillion.
The Budget Office attributed the shortfall to lower crude oil prices and reduced production levels.
Average crude oil production was reported at 1.54 million barrels per day, below the budget benchmark of 1.78 million barrels per day.
Average international crude oil prices also settled below projections during the period under review.
Despite challenges in the oil sector, non-oil revenue recorded strong growth.
Gross non-oil revenue reached ₦16.09 trillion, surpassing the budget estimate of ₦10.81 trillion by more than ₦5 trillion.
The report credited the improvement to stronger collections from Company Income Tax, Value Added Tax, Customs duties and the Electronic Money Transfer Levy.
While revenue fell below target, government debt obligations increased substantially during the year.
The report showed that debt servicing and related debt expenditure rose to ₦12.36 trillion, exceeding the budget provision of ₦8.27 trillion.
“A total of ₦12.36tn was committed as total debt expenditure for the year, 52.71 per cent above the ₦8.27tn budgeted for the period,” the report noted.
Capital expenditure also faced implementation challenges.
According to the Budget Office, ₦5.81 trillion was released and cash-backed for capital projects across Ministries, Departments and Agencies. However, utilisation remained below expectations.
The report stated that MDAs had utilised ₦3.27 trillion of the released funds as of June 30, 2025.
“A total of ₦5.81tn was released and cash-backed to MDAs for their 2024 capital projects and programmes in 2024 fiscal year. Available fiscal data revealed that only ₦3.27tn (81.91 per cent) of the total amount released and cash-backed was utilized by MDAs,” it added.
The report also pointed to Nigeria’s growing debt burden.
Total public debt climbed to ₦144.67 trillion by the end of December 2024. The debt-to-GDP ratio rose to 61.22 per cent, exceeding both Nigeria’s self-imposed threshold of 40 per cent and the 56 per cent benchmark often used for comparable economies.
“This translates to a net present value of total public debt/GDP ratio of 61.22 per cent as at the end of December, 2024. This is above the country’s threshold of 40 per cent and the international threshold of 56 per cent for comparator countries,” the report stated.
Despite the mounting debt profile, the Budget Office expressed optimism that ongoing reforms would improve government finances.
It cited efforts aimed at strengthening tax administration, boosting non-oil revenue, improving remittances from government-owned enterprises and reducing leakages.
