Nigeria Exceeded 2024 Borrowing Target by N4.79tn Amid Revenue Shortfall

The Federal Government exceeded its 2024 borrowing target by N4.79 trillion, raising a total of N12.62 trillion against the budgeted N7.83 trillion, according to the Budget Office’s Fourth Quarter and Consolidated Budget Implementation Report for 2024.

The report attributed the higher borrowing to a significant revenue shortfall that widened the fiscal deficit beyond projections.

Government revenue for the year 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 slightly below the approved N35.06 trillion, resulting in a fiscal deficit of N13.51 trillion, compared to the budgeted N9.18 trillion.

To finance the deficit, the government borrowed N6.06 trillion domestically, N3.37 trillion externally, and received N3.19 trillion in budget support that was not included in the original budget. It also secured N1.98 trillion in multilateral and bilateral project-tied loans.

The report noted that the borrowing financed about 36 per cent of the 2024 budget, highlighting the government’s continued dependence on debt.

Revenue performance was weakened by lower oil earnings. Gross oil revenue came in at N15.07 trillion, falling N4.93 trillion below target due to lower crude oil prices and production. However, non-oil revenue outperformed expectations, rising to N16.09 trillion, driven by stronger collections from Company Income Tax, Value Added Tax, Electronic Money Transfer Levy and Customs revenue.

Debt servicing also increased significantly, with the government spending N12.36 trillion on debt obligations, exceeding the budgeted N8.27 trillion by 52.7 per cent.

The report further showed that Nigeria’s total public debt rose to N144.67 trillion by the end of December 2024, pushing the debt-to-GDP ratio to 61.22 per cent, above both Nigeria’s 40 per cent benchmark and the 56 per cent international threshold for comparable economies.

Despite the fiscal pressures, the Budget Office expressed optimism that ongoing reforms to improve tax administration, boost non-oil revenue, plug leakages and strengthen remittances from government-owned enterprises would reduce reliance on borrowing and improve fiscal sustainability.

Economic experts, however, urged the government to exercise greater fiscal discipline. While acknowledging that borrowing is sometimes necessary, they stressed that loans should be directed toward productive investments capable of generating economic returns, warning that rising debt and debt servicing costs could worsen inflation and increase the cost of living if not properly managed.