The Federal Government exceeded its 2024 borrowing target by N4.79 trillion, driven by a significant revenue shortfall that widened the fiscal deficit, according to the Budget Office.
In its Fourth Quarter and Consolidated Budget Implementation Report, the government’s new borrowings rose to N12.62tn, 61.2% above the approved N7.83tn.
The surge in borrowing followed a larger-than-expected deficit of N13.51tn, far above the budgeted N9.18tn. Total revenue stood at N20.98tn, missing the N25.88tn target by N4.90tn, while expenditure remained largely on track at N34.49tn.
The report indicates that the fiscal gap was mainly caused by weak revenue performance rather than excessive spending.
Oil revenue underperformed significantly, falling N4.93tn short of projections due to lower crude prices and reduced production levels. In contrast, non-oil revenue exceeded expectations, driven by stronger collections from taxes and customs.
To finance the deficit, the government relied heavily on borrowing. Domestic borrowing met its target at N6.06tn, but foreign borrowing rose to N3.37tn—well above projections. Additionally, N3.19tn in budget support, not initially planned, contributed to the increase in total debt.
Overall, borrowings accounted for about 36% of the 2024 budget, highlighting continued dependence on debt financing.
Nigeria’s total public debt climbed to N144.67tn by the end of 2024, pushing the debt-to-GDP ratio to 61.22%, above both the national threshold of 40% and the international benchmark of 56%.
Debt servicing also surged, with N12.36tn spent, over 50% higher than budgeted, raising concerns about fiscal sustainability.
Experts warn that rising borrowing could worsen inflation and increase the cost of living if not properly managed. While some argue that borrowing can support growth when invested in productive sectors, others stress the need for stronger revenue generation and fiscal discipline.
The government maintains that ongoing reforms aimed at improving tax collection, boosting non-oil revenue, and reducing leakages will help curb borrowing in the medium term.
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