The Federal Government exceeded its 2024 borrowing target by N4.79tn after a wider-than-expected fiscal deficit forced it to raise substantially more debt than originally planned, according to the latest Budget Office of the Federation report.

The Fourth Quarter and Consolidated Budget Implementation Report for 2024 showed that the Federal Government borrowed N12.62tn during the year, surpassing the budgeted borrowing programme of N7.83tn by N4.79tn, representing a 61.2 per cent increase.

The additional borrowing followed a significant revenue shortfall that widened the fiscal deficit to N13.51tn, far above the approved deficit of N9.18tn.

According to the report, total Federal Government revenue stood at N20.98tn against a budget target of N25.88tn, leaving a revenue gap of N4.90tn. Total expenditure, however, amounted to N34.49tn, only N561.29bn below the approved estimate of N35.06tn, indicating that weaker revenue performance, rather than higher spending, drove the larger deficit.

“The revenue and expenditure outturn of the Federal Government resulted in a fiscal deficit of N13.51tn in the 2024 fiscal year. This was N4.34tn (47.33 per cent) above the projected budget deficit estimate for the year,” the report stated.

The deficit also exceeded the N10.55tn recorded in 2023, underscoring growing pressure on the country’s public finances.

An analysis of the government’s financing profile showed that domestic borrowing remained on target at N6.06tn, while foreign borrowing rose to N3.37tn from the budgeted N1.77tn, exceeding the target by N1.60tn.

The report also disclosed that the government received N3.19tn in budget support, despite making no provision for such financing in the 2024 budget. The source of the funding, classified as new borrowing, was not identified.

Combined, domestic borrowing, foreign borrowing and budget support raised total new borrowings to N12.62tn, financing about 36 per cent of the 2024 budget.

In addition, multilateral and bilateral project-tied loans amounted to N1.98tn, exceeding the budget estimate of N1.05tn by N929.45bn. Expected privatisation proceeds of N298.49bn, however, failed to materialise.

The Budget Office attributed the wider financing gap largely to revenue underperformance.

Although total government revenue increased by 68.11 per cent from N12.48tn in 2023 to N20.98tn in 2024, it remained 18.92 per cent below the annual budget target.

Oil revenue was the weakest performer, with gross oil receipts of N15.07tn falling N4.93tn short of the budget estimate of N19.99tn. The report attributed the shortfall to lower crude oil prices, which averaged $74.65 per barrel against the budget benchmark of $77.96, and lower production of 1.54 million barrels per day compared with the projected 1.78 million barrels.

By contrast, non-oil revenue outperformed expectations, reaching N16.09tn—48.91 per cent above the budget estimate of N10.81tn—driven by stronger collections from Company Income Tax, Value Added Tax, the Electronic Money Transfer Levy and Customs revenue.

While revenue fell short, government expenditure remained broadly within budget. Total spending rose to N34.49tn, an increase of N11.45tn, or 49.7 per cent, over the N23.04tn recorded in 2023.

The report also showed that debt servicing costs surged during the year, with total debt expenditure rising to N12.36tn, exceeding the budgeted N8.27tn by 52.71 per cent.

“A total of N12.36tn was committed as total debt expenditure for the year, 52.71 per cent above the N8.27tn budgeted for the period,” the report stated.

Capital spending also came under pressure. Although N5.81tn was released and cash-backed for capital projects, Ministries, Departments and Agencies had utilised only N3.27tn—81.91 per cent of the amount released—as of June 30, 2025.

The report further showed that Nigeria’s total public debt rose to N144.67tn at the end of December 2024, pushing the debt-to-GDP ratio to 61.22 per cent.

The Budget Office warned that the ratio had exceeded both Nigeria’s 40 per cent debt sustainability threshold and the 56 per cent benchmark often applied to comparable economies.

Despite the weaker fiscal outcome, the office expressed confidence that reforms aimed at strengthening tax administration, improving non-oil revenue mobilisation, reviewing fiscal incentives, plugging revenue leakages and increasing remittances from government-owned enterprises would reduce dependence on borrowing over the medium term.

Commenting on the report, Chief Executive Officer of CSA Advisory, Aliyu Ilias, warned that the sharp rise in borrowing could worsen inflation and increase debt servicing pressures if not carefully managed.

“The negative impact is that we already have issues of debt service. You look at our budget, about N15tn is needed to service debt, and now we’re incurring more,” he said.

Chief Economist at the Nigerian Economic Summit Group, Dr Olusegun Omisakin, argued that the central issue was not the volume of borrowing but how the funds were utilised.

“The challenge is what we use the money for. If Nigeria borrows and you see the impact on infrastructure, nobody will really be concerned about the rate of borrowing,” he said.

Similarly, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, urged the government to slow the pace of debt accumulation while strengthening domestic revenue generation to ensure long-term fiscal sustainability.