The Federal Government exceeded its 2024 borrowing target by N4.79tn after a wider-than-projected budget deficit forced it to raise significantly more financing than originally planned, the Budget Office of the Federation has disclosed.
According to the latest Fourth Quarter and Consolidated Budget Implementation Report for 2024, the Federal Government’s new borrowings rose to N12.62tn, exceeding the budgeted N7.83tn by N4.79tn, or 61.2 per cent.
The higher borrowing requirement followed a substantial revenue shortfall, which pushed the fiscal deficit to N13.51tn, well above the approved deficit of N9.18tn.
The report showed that aggregate Federal Government revenue stood at N20.98tn, compared with the budget estimate of N25.88tn, representing a shortfall of N4.90tn.
Total expenditure, however, amounted to N34.49tn, only N561.29bn below the approved estimate of N35.06tn, indicating that the wider fiscal gap was driven primarily by weaker revenue rather than higher spending.
The report read, “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.”
It added that the deficit also exceeded the N10.55tn recorded in 2023, showing the increasing pressure on the country’s public finances.
An analysis of the government’s financing profile showed that domestic borrowing remained exactly on target at N6.06tn, but higher foreign borrowing and budget support significantly increased overall borrowings.
Foreign borrowing rose from the budgeted N1.77tn to N3.37tn, representing an increase of N1.60tn above target.
Also, the Federal Government received N3.19tn in budget support, despite making no provision for such financing in the 2024 budget. The source of the budget support, which was classified as new borrowing, was not disclosed.
Together, domestic borrowing, foreign borrowing and budget support brought total new borrowings to N12.62tn, exceeding the approved borrowing programme by N4.79tn.
An analysis of the Budget Office report showed that new borrowings financed about 36 per cent of the Federal Government’s 2024 budget, highlighting the country’s continued dependence on debt to fund public expenditure.
Separate from the new borrowings, the report showed that multilateral and bilateral project-tied loans amounted to N1.98tn, compared with the budget estimate of N1.05tn, representing a positive variance of N929.45bn.
The report also showed that expected privatisation proceeds of N298.49bn did not materialise, as no revenue was realised from that source during the fiscal year.
According to the report, the fiscal deficit “was financed through multi-lateral/bilateral project-tied loans of N1.98tn, domestic borrowing of N6.06tn, foreign borrowing of N3.37tn and budget support of N3.19tn in the period under review.”
The report attributed the wider financing gap largely to revenue underperformance.
It stated that total Federal Government revenue stood at N20.98tn, representing an increase of N8.50tn, or 68.11 per cent, over the N12.48tn generated in 2023. However, revenue remained N4.89tn, or 18.92 per cent, below the annual budget target.
It stated, “Total Revenue Inflow of the Federal Government stood at N20.98tn at the end of December 2024. This represents an N8.50tn (68.11 per cent) increase when compared to N12.48tn that was reported at the end of 2023, but N4.89tn (18.92 per cent) lower than the 2024 annual budget estimate.”
Oil revenue remained the biggest source of weakness. Gross oil revenue amounted to N15.07tn, falling N4.93tn below the budget estimate of N19.99tn.
The report explained that international crude oil prices averaged $74.65 per barrel during the fourth quarter, below the budget benchmark of $77.96 per barrel. Average daily crude oil production also stood at 1.54 million barrels per day, well below the budget assumption of 1.78 million barrels per day.
Despite the weak oil performance, non-oil revenue exceeded expectations. The report showed that gross non-oil revenue reached N16.09tn, surpassing the annual estimate of N10.81tn by N5.29tn, or 48.91 per cent.
According to the report, the improved performance was driven mainly by stronger collections from Company Income Tax, Value Added Tax, Electronic Money Transfer Levy and Customs revenue.
Although revenue fell short of expectations, government expenditure remained broadly aligned with the approved budget.
Total expenditure stood at N34.49tn, only N561.29bn, or 1.6 per cent, below the budget estimate of N35.06tn.
Compared with 2023, however, expenditure increased by N11.45tn, or 49.7 per cent, from N23.04tn.
The report showed that non-debt recurrent expenditure amounted to N8.53tn, below the budget estimate of N11.27tn, while debt service obligations increased significantly during the year.
According to the report, total debt expenditure reached N12.36tn, exceeding the budgeted N8.27tn by 52.71 per cent.
It stated, “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.”
Amid mounting fiscal pressures, the Federal Government struggled to prioritise capital expenditure.
The report disclosed that N5.81tn was released and cash-backed for capital projects during the 2024 fiscal year.
