Morganable Economy Watch
According to the report, total Federal Government revenue stood at N20.98 trillion, falling short of the N25.88 trillion target by N4.90 trillion.
kaNo —
The Federal Government exceeded its 2024 borrowing target by a wide margin, raising a total of N12.62 trillion in new debt as a larger-than-expected fiscal deficit forced authorities to seek additional financing, according to the Budget Office of the Federation.
Details contained in the Fourth Quarter and Consolidated Budget Implementation Report for 2024 showed that actual borrowings surpassed the budgeted N7.83 trillion by N4.79 trillion, representing an overrun of 61.2 per cent.
The sharp increase in borrowing was driven primarily by a significant shortfall in government revenue, which widened the fiscal deficit to N13.51 trillion far above the approved N9.18 trillion for the year.
According to the report, total Federal Government revenue stood at N20.98 trillion, falling short of the N25.88 trillion target by N4.90 trillion.
This indicates that the widening deficit was largely the result of weaker revenue performance rather than excessive spending.
“The revenue and expenditure outturn of the Federal Government resulted in a fiscal deficit of N13.51 trillion in the 2024 fiscal year. This was N4.34 trillion (47.33 per cent) above the projected budget deficit estimate for the year,” the report stated.
The deficit also exceeded the N10.55 trillion recorded in 2023, underscoring mounting pressure on Nigeria’s public finances amid persistent economic challenges.
A breakdown of the government’s financing profile revealed that domestic borrowing remained in line with projections at N6.06 trillion.
However, foreign borrowing and additional budget support significantly pushed total debt beyond planned levels.
Foreign borrowing rose to N3.37 trillion, exceeding the budgeted N1.77 trillion by N1.60 trillion.
In addition, the Federal Government received N3.19 trillion in budget support funding that was not included in the original 2024 budget and whose source was not disclosed in the report.
Combined, domestic borrowing, foreign loans and budget support brought total new borrowings to N12.62 trillion, substantially above the approved borrowing programme.
New Borrowings Gulp 36% Of 2024 Budget
An analysis of the report showed that new borrowings financed about 36 per cent of the Federal Government’s 2024 budget, highlighting the country’s continued reliance on debt to fund public expenditure.
Separate from these borrowings, multilateral and bilateral project-tied loans totalled N1.98 trillion, significantly higher than the budget estimate of N1.05 trillion, representing a positive variance of N929.45 billion.
“The fiscal deficit was financed through multi-lateral/bilateral project-tied loans of N1.98 trillion, domestic borrowing of N6.06 trillion, foreign borrowing of N3.37 trillion and budget support of N3.19 trillion in the period under review,” the report added.
Despite the revenue shortfall, government earnings still recorded strong year-on-year growth.
Total revenue increased by N8.50 trillion, or 68.11 per cent, compared to N12.48 trillion generated in 2023.
However, this improvement was insufficient to meet budget expectations, with revenue remaining 18.92 per cent below the annual target.
Oil Revenue Falls Short Of N19. 99tn
Oil revenue remained the weakest link in government earnings. Gross oil revenue stood at N15.07 trillion, falling short of the N19.99 trillion target by N4.93 trillion.
The report attributed the underperformance to both lower oil prices and reduced production levels.
Average international crude oil prices stood at $74.65 per barrel during the fourth quarter, below the budget benchmark of $77.96 per barrel.
Similarly, daily crude oil production averaged 1.54 million barrels per day, significantly lower than the projected 1.78 million barrels per day.
In contrast, non-oil revenue performed strongly, offering some relief to the government’s fiscal position.
Gross non-oil revenue reached N16.09 trillion, exceeding the annual estimate of N10.81 trillion by N5.29 trillion, or 48.91 per cent.
The improved performance was driven largely by stronger collections from Company Income Tax, Value Added Tax, Electronic Money Transfer Levy and customs duties.
At N34.49 trillion, total expenditure was only N561.29 billion, or 1.6 per cent, below the approved estimate.
However, compared to 2023, government spending rose sharply by N11.45 trillion, representing a 49.7 per cent increase from N23.04 trillion.
Non-Debt Revenue Stood At N8. 53tn
The report showed that non-debt recurrent expenditure stood at N8.53 trillion, below the budget estimate of N11.27 trillion.
Meanwhile, debt servicing costs surged significantly, reflecting the growing burden of public debt.
Total debt expenditure reached N12.36 trillion, exceeding the budgeted N8.27 trillion by 52.71 per cent.
“A total of N12.36 trillion was committed as total debt expenditure for the year, 52.71 per cent above the N8.27 trillion budgeted for the period,” the report stated.
The rising cost of debt has raised concerns about fiscal sustainability, as a larger share of government revenue is increasingly being used to service existing obligations.
Amid these pressures, the Federal Government also faced challenges in implementing capital projects.
The report disclosed that N5.81 trillion was released and cash-backed for capital expenditure during the 2024 fiscal year.
However, utilisation levels remained below expectations. Ministries, Departments and Agencies utilised N3.27 trillion of the released funds, representing 81.91 per cent of the amount cash-backed as of June 30, 2025.
“A total of N5.81 trillion was released and cash-backed to MDAs for their 2024 capital projects and programmes in the 2024 fiscal year. Available fiscal data revealed that only N3.27 trillion (81.91 per cent) of the total amount released and cash-backed was utilised by MDAs,” the report noted.
The report further highlighted the rapid growth in Nigeria’s overall debt profile. Total public debt rose to N144.67 trillion at the end of December 2024, with the debt-to-GDP ratio climbing to 61.22 per cent.
The Budget Office warned that the ratio has now exceeded both Nigeria’s self-imposed threshold of 40 per cent and the international benchmark of 56 per cent for comparable economies.
The rising debt levels, coupled with increasing debt servicing costs and persistent revenue challenges, underscore the urgent need for fiscal reforms to strengthen revenue generation and reduce reliance on borrowing.
