The Federal Government borrowed N12.62 trillion in 2024, exceeding the approved borrowing target of N7.83 trillion by N4.79 trillion, according to the latest Fourth Quarter and Consolidated Budget Implementation Report released by the Budget Office of the Federation.
The report showed that the higher borrowing was driven by a larger-than-expected budget deficit caused mainly by weak revenue performance.
According to the Budget Office, the fiscal deficit rose to N13.51 trillion, which was N4.34 trillion above the approved deficit of N9.18 trillion and also higher than the N10.55 trillion recorded in 2023.
Total Federal Government revenue stood at N20.98 trillion, falling short of the budget target of N25.88 trillion by N4.90 trillion.
Expenditure, however, remained close to the approved level, with total spending reaching N34.49 trillion, only N561.29 billion below the budget estimate of N35.06 trillion.
The report indicated that domestic borrowing remained on target at N6.06 trillion, but foreign borrowing and additional budget support significantly increased overall debt accumulation.
Foreign borrowing rose to N3.37 trillion, compared with the budgeted N1.77 trillion, while the government also received N3.19 trillion in budget support, which had not been provided for in the 2024 budget.
The source of the budget support was not disclosed in the report.
Together, domestic borrowing, foreign borrowing and budget support pushed total new borrowing to N12.62 trillion, representing about 36 per cent of the 2024 federal budget.
In addition, multilateral and bilateral project-tied loans amounted to N1.98 trillion, compared with the budget estimate of N1.05 trillion.
The report also noted that expected privatisation proceeds of N298.49 billion were not realised during the fiscal year.
Oil revenue remained the major source of weakness.
Gross oil revenue was N15.07 trillion, which was N4.93 trillion below the budget estimate of N19.99 trillion.
The Budget Office attributed this to lower crude oil prices and weaker production levels.
Average crude oil price in the fourth quarter was $74.65 per barrel, below the budget benchmark of $77.96 per barrel, while average daily production was 1.54 million barrels per day, compared with the budget assumption of 1.78 million barrels per day.
Non-oil revenue performed better than expected.
Gross non-oil revenue reached N16.09 trillion, exceeding the target of N10.81 trillion by N5.29 trillion, driven by stronger collections from Company Income Tax, Value Added Tax, Electronic Money Transfer Levy and Customs revenue.
Although revenue underperformed, government spending remained broadly within the approved budget.
Compared with 2023, however, total expenditure increased by N11.45 trillion, or 49.7 per cent, from N23.04 trillion.
Debt service costs rose sharply during the year.
The report showed that total debt expenditure reached N12.36 trillion, exceeding the budgeted N8.27 trillion by 52.71 per cent.
Capital spending also faced challenges.
The government released and cash-backed N5.81 trillion for capital projects, but Ministries, Departments and Agencies had utilised only N3.27 trillion as of June 30, 2025.
Nigeria’s public debt continued to rise.
The report stated that total public debt climbed to N144.67 trillion by the end of December 2024, while the debt-to-GDP ratio increased to 61.22 per cent.
The Budget Office warned that this exceeded Nigeria’s self-imposed threshold of 40 per cent and the international benchmark of 56 per cent for comparable economies.
Despite the weaker fiscal outcome, the office said ongoing reforms aimed at improving tax administration, boosting non-oil revenue, reducing leakages and strengthening remittances from government-owned enterprises should help reduce reliance on borrowing over time.
Economists have expressed mixed views on the development.
Development economist Aliyu Ilias warned that the sharp increase in borrowing could worsen inflation and raise the cost of living if not properly managed.
He said the growing debt service burden remains a major concern and stressed that the key issue is how effectively borrowed funds are used.
Chief Economist of the Nigerian Economic Summit Group, Dr. Olusegun Omisakin, said borrowing itself is not necessarily the problem, but whether the funds are invested in infrastructure and other productive assets.
Economist Muda Yusuf also called for stronger revenue generation and fiscal discipline to ensure that Nigeria’s debt remains sustainable.
The debate over borrowing has also drawn in public officials and traditional leaders.
Former Central Bank Governor and Emir of Kano, Muhammadu Sanusi II, recently questioned why the government was still borrowing despite the removal of petrol subsidy.
The Presidency, through Daniel Bwala, defended the borrowing strategy, saying it is intended to finance critical infrastructure.
Finance Minister Taiwo Oyedele has argued that borrowing should be judged by the purpose, cost and expected return of the projects being financed, while also maintaining that Nigeria cannot continue to rely mainly on debt to fund development and must build a more sustainable fiscal system.
