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The Federal Government borrowed significantly more than originally planned in 2024 after revenue fell short of expectations, widening the country’s fiscal deficit and increasing pressure on public finances.

A new Budget Office of the Federation implementation report showed that the government raised a total of ₦12.62 trillion in fresh borrowing during the 2024 fiscal year.

The amount exceeded the approved borrowing target of ₦7.83 trillion by ₦4.79 trillion, representing an increase of about 61 per cent.

According to the report, the higher borrowing requirement was driven by a widening budget deficit caused mainly by weaker-than-expected revenue performance.

The Federal Government recorded a fiscal deficit of ₦13.51 trillion in 2024, significantly higher than the approved projection of ₦9.18 trillion and above 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 stood at ₦20.98 trillion, falling short of the budget target of ₦25.88 trillion by nearly ₦4.9 trillion. Total expenditure, however, remained broadly in line with projections at ₦34.49 trillion, slightly below the approved estimate of ₦35.06 trillion.

The report indicated that the widening deficit was largely driven by lower-than-expected revenue rather than excessive spending.

A breakdown of the financing profile showed that domestic borrowing remained within the approved limit, with the government raising ₦6.06 trillion locally.

Foreign borrowing, however, rose sharply. Against a projected ₦1.77 trillion, the government borrowed ₦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.

Combined with domestic and foreign loans, the budget support pushed total new borrowing to ₦12.62 trillion.

The report showed that fresh borrowing financed more than one-third of the 2024 budget, underscoring the government’s continued reliance on debt to fund public expenditure.

Project-tied multilateral and bilateral loans also exceeded expectations, reaching ₦1.98 trillion, compared to the budget estimate of ₦1.05 trillion.

Meanwhile, expected proceeds from privatisation failed to materialise. Although the government projected ₦298.49 billion from asset sales, no revenue was realised from that source.

Oil revenue continued to underperform during the year.

Gross oil revenue stood at ₦15.07 trillion, falling ₦4.93 trillion short of the budget estimate of ₦19.99 trillion.

The Budget Office attributed the shortfall to lower crude oil prices and reduced production.

Average crude oil production was 1.54 million barrels per day, below the budget benchmark of 1.78 million barrels per day, while international crude oil prices also settled below projections.

Despite the weak oil performance, 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 attributed the improvement to stronger collections from Company Income Tax, Value Added Tax (VAT), Customs duties and the Electronic Money Transfer Levy.

Debt servicing also rose sharply during the year.

According to the report, total debt servicing and related debt expenditure reached ₦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 experienced implementation challenges.

The Budget Office said ₦5.81 trillion was released and cash-backed for capital projects across Ministries, Departments and Agencies (MDAs), but utilisation remained below expectations.

According to the report, 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 further highlighted Nigeria’s growing debt burden.

Total public debt rose to ₦144.67 trillion by the end of December 2024, while the 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 commonly 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 rising debt profile, the Budget Office expressed optimism that ongoing reforms aimed at strengthening tax administration, boosting non-oil revenue, improving remittances from government-owned enterprises and reducing leakages would improve the country’s fiscal position.

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