The Federal Government exceeded its 2024 borrowing target by N4.79tn, raising total new debt to ₦12.62 trillion.
Revenue Shortfalls and a Widened Fiscal Deficit
Public finances faced severe strain throughout the 2024 fiscal year as weaker-than-expected revenue forced the government to borrow substantially more than initially approved. According to the Fourth Quarter and Consolidated Budget Implementation Report released by the Budget Office, the administration raised ₦12.62 trillion in fresh debt, exceeding the budgeted N7.83tn by N4.79tn, or 61.2 per cent.
That surge in borrowing stemmed directly from a widening fiscal deficit. The report documented a fiscal gap of ₦13.51 trillion for the year, significantly higher than the approved deficit projection of ₦9.18 trillion and surpassing the ₦10.55 trillion recorded in 2023. Total revenue landed at ₦20.98 trillion against an ambitious budget target of ₦25.88 trillion, leaving a revenue gap of N4.90tn. Government spending, however, remained closely aligned with projections at ₦34.49 trillion, proving that the widening deficit resulted from missed revenue goals rather than runaway spending.
Oil Underperformance Versus Non-Oil Growth
The root of the revenue underperformance lay squarely in the oil sector. Gross oil revenue totaled ₦15.07 trillion, falling short of the projected N19.99tn by ₦4.93 trillion. International crude oil prices averaged $74.65 per barrel during the fourth quarter, lagging behind the budget benchmark of $77.96 per barrel. Average daily oil production also missed expectations, settling at 1.54 million barrels per day compared to the budgeted 1.78 million barrels.
Conversely, non-oil revenue provided a strong counterbalance. Gross non-oil collections climbed to ₦16.09 trillion, surpassing the budget estimate of N10.81tn by N5.29tn. That overperformance drew strength from enhanced collections across Company Income Tax, Value Added Tax, Customs revenue, and the Electronic Money Transfer Levy.
Financing Profile and Unbudgeted Support
An examination of the financing profile indicates that domestic borrowing stayed strictly on target at ₦6.06 trillion. Foreign borrowing, however, outpaced expectations. Actual foreign borrowing climbed to ₦3.37 trillion, eclipsing the approved ₦1.77 trillion by N1.60tn.
Furthermore, the government secured ₦3.19 trillion in budget support despite making no provision for such financing in the original budget. The implementation report classified this influx as new borrowing without disclosing its exact source. Together with domestic loans, foreign loans, and budget support, these obligations brought total new borrowings to ₦12.62 trillion. Separately, multilateral and bilateral project-tied loans accounted for ₦1.98 trillion, while anticipated privatization proceeds of ₦298.49 billion failed to materialize as asset sales generated no revenue.
Mounting Debt Servicing and Economic Warnings
Debt obligations consumed a massive portion of public resources during the fiscal cycle. Total debt expenditure reached ₦12.36 trillion, exceeding the budgeted ₦8.27tn by 52.71 per cent.
Capital project implementation encountered hurdles as well.
“The fact is that it has negative and positive impacts. But the negative impact is that we already have issues of debt service. You look at our budget, about ₦15tn is needed to service debt, and now we’re incurring more.”
Aliyu Ilias, Chief Executive Officer of CSA Advisory, via The Sun Nigeria
