The Federal Government borrowed ₦12.62 trillion in 2024, overshooting its original plan by ₦4.79 trillion or 61.2%, after revenue collections fell far short of budget targets. The gap was primarily driven by weak oil earnings, which missed projections by almost ₦5 trillion, according to the Budget Office of the Federation's Fourth Quarter and Consolidated Budget Implementation Report for 2024.
Borrowing far exceeded the approved plan
President Bola Tinubu's administration had set a borrowing target of ₦7.83 trillion in the 2024 budget to cover the deficit between projected revenue of ₦25.88 trillion and expenditure of ₦35.06 trillion. However, actual revenue stood at only ₦20.98 trillion – a shortfall of ₦4.90 trillion – while expenditure came in at ₦34.49 trillion, just ₦561.29 billion below budget. This pushed the fiscal deficit from the planned ₦9.18 trillion to ₦13.51 trillion, making additional borrowing unavoidable.
Sources of the borrowed funds
The ₦12.62 trillion came from three main sources: domestic borrowing (₦6.06 trillion), foreign borrowing (₦3.37 trillion), and budget support financing (₦3.19 trillion). Domestic borrowing stayed within the approved limit, but foreign borrowing nearly doubled the initial projection. Notably, the ₦3.19 trillion in budget support financing had no provision in the approved 2024 budget, and the report did not specify the institutions providing it, raising questions about transparency.
Oil revenues disappoint again
The largest contributor to the revenue shortfall was oil. The government had expected ₦19.99 trillion from oil revenue but realized only ₦15.07 trillion – a gap of ₦4.92 trillion. Average crude oil prices settled at $74.65 per barrel, below the budget benchmark of $77.96, while daily production averaged 1.54 million barrels, well short of the 1.78 million barrels per day target. Persistent crude oil theft, pipeline vandalism, and production challenges hindered performance.
Non-oil taxes provide some relief
Non-oil revenue performed strongly, reaching ₦16.09 trillion against the projection of ₦10.81 trillion. The Budget Office attributed the surplus to higher collections from Company Income Tax, Value Added Tax, the Electronic Money Transfer Levy, and customs revenue. This strong tax performance softened the blow from weak oil earnings but was insufficient to close the overall revenue gap.
One in every three naira spent came from loans
Roughly 36% of all Federal Government spending in 2024 was financed through borrowing. That means more than one out of every three naira spent last year was borrowed rather than earned. Debt servicing also surged, costing ₦12.36 trillion – 52.7% above the ₦8.27 trillion budgeted – leaving less room for education, healthcare, and infrastructure.
Capital spending lags
Although ₦5.81 trillion was released for capital projects, only ₦3.27 trillion had been utilized as of June 30, 2025, representing an absorption rate of 81.91% of funds released. This suggests implementation bottlenecks and inefficiencies in project execution.
Nigeria's debt burden continues to grow
Nigeria's total public debt reached ₦144.67 trillion by end-2024. The debt-to-GDP ratio stood at 61.22%, above Nigeria's self-imposed benchmark of 40% and higher than the 56% often referenced for comparable economies. The Budget Office noted these figures remain provisional because capital budget implementation has been extended through December 2025.
Economists caution that borrowing is not inherently harmful if used for productive investments like roads, power, and education. However, when debt primarily funds recurrent spending without generating future revenue, repayment becomes challenging. The Budget Office stated that ongoing reforms – including stronger tax administration, improved non-oil revenue collection, tighter fiscal incentives, and better remittances from state-owned enterprises – are expected to reduce dependence on borrowing over time. For now, Nigeria remains caught in a cycle where oil earnings disappoint, borrowing rises, and citizens await tangible improvements in the economy.
