Budget Office report reveals lower-than-expected revenue forced government to raise additional debt, pushing fiscal deficit to ₦13.51tn……
The Federal Government borrowed ₦12.62 trillion in 2024, overshooting its approved borrowing target by ₦4.79 trillion, after a significant revenue shortfall widened the country’s fiscal deficit beyond budget projections.
Details contained in the Budget Office of the Federation’s Fourth Quarter and Consolidated Budget Implementation Report for 2024 show that the government’s new borrowings exceeded the budgeted ₦7.83 trillion by 61.2%, reflecting growing financing pressures during the fiscal year.
According to the report, the Federal Government recorded a fiscal deficit of ₦13.51 trillion, compared to the approved deficit of ₦9.18 trillion, as revenues failed to keep pace with planned expenditure.
Government revenue for the year stood at ₦20.98 trillion, falling ₦4.90 trillion short of the ₦25.88 trillion projected in the budget.
Although expenditure remained largely within the approved spending plan, totaling ₦34.49 trillion against a budget estimate of ₦35.06 trillion, the weaker revenue performance significantly widened the financing gap.
The Budget Office noted that the 2024 deficit was ₦4.34 trillion, or 47.33%, higher than initially projected and also surpassed the ₦10.55 trillion deficit recorded in 2023.
Foreign borrowing and budget support drive higher debt
An analysis of the government’s financing mix showed that domestic borrowing remained in line with budget expectations at ₦6.06 trillion.
However, foreign borrowing rose sharply to ₦3.37 trillion, exceeding the budget estimate of ₦1.77 trillion by ₦1.60 trillion.
The report also disclosed that the Federal Government received ₦3.19 trillion in budget support during the year, despite making no provision for such financing in the 2024 budget. The source of the budget support was not identified, but it was classified as part of the government’s new borrowing.
Combined with domestic and foreign loans, total new borrowings reached ₦12.62 trillion, accounting for roughly 36% of total government spending in 2024.
In addition, multilateral and bilateral project-tied loans amounted to ₦1.98 trillion, significantly higher than the ₦1.05 trillion originally budgeted.
The report further revealed that the government failed to realize expected privatization proceeds of ₦298.49 billion, as no revenue was generated from asset sales during the year.
Oil revenue disappoints as non-oil collections outperform
The Budget Office attributed much of the revenue gap to weaker oil earnings.
Gross oil revenue totaled ₦15.07 trillion, falling ₦4.93 trillion below the budget estimate of ₦19.99 trillion.
According to the report, average international crude oil prices settled at $74.65 per barrel during the fourth quarter, below the budget benchmark of $77.96 per barrel, while average daily crude oil production stood at 1.54 million barrels per day, compared to the budget assumption of 1.78 million barrels per day.
Despite the underperformance in the oil sector, non-oil revenue exceeded expectations.
Gross non-oil revenue rose to ₦16.09 trillion, surpassing the annual target of ₦10.81 trillion by ₦5.29 trillion, driven by stronger collections from Company Income Tax (CIT), Value Added Tax (VAT), Electronic Money Transfer Levy (EMTL), and Customs revenue.
Overall, government revenue increased by 68.11% from ₦12.48 trillion recorded in 2023, although it remained nearly 19% below the budget target.
Debt servicing surges above budget
While recurrent spending came in below projections, debt servicing placed significant pressure on public finances.
The report showed that total debt-related expenditure climbed to ₦12.36 trillion, exceeding the budget allocation of ₦8.27 trillion by 52.71%.
The Budget Office also disclosed that ₦5.81 trillion was released for capital projects during the year. However, only ₦3.27 trillion, representing 81.91% of the cash-backed releases, had been utilized by Ministries, Departments and Agencies (MDAs) as of June 30, 2025.
Public debt climbs above sustainability thresholds
Nigeria’s total public debt rose to ₦144.67 trillion at the end of December 2024, pushing the country’s debt-to-GDP ratio to 61.22%.
According to the Budget Office, the figure exceeds both Nigeria’s self-imposed debt threshold of 40% and the 56% benchmark commonly used for comparable economies.
Despite the worsening fiscal position, the agency expressed optimism that ongoing reforms aimed at improving tax administration, strengthening non-oil revenue, reviewing fiscal incentives, blocking revenue leakages, and improving remittances from government-owned enterprises would reduce dependence on borrowing over the medium term.
The Presidency has defended the borrowing programme, insisting that the loans are being directed toward critical infrastructure and long-term economic development.
Meanwhile, Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has argued that the focus should be on how borrowed funds are deployed rather than on the size of the debt alone, while also acknowledging that Nigeria must gradually build a more sustainable fiscal system that relies less on borrowing to finance development.
