Nigeria’s Debt Crisis Deepens as Borrowing Surges Past Target

The Federal Government borrowed ₦4.79 trillion more than approved in 2024 after revenue collapsed well below target, according to a new Budget Office report. This overshoot forms part of a troubling pattern in Nigeria’s rising debt profile, now drawing sharp scrutiny from economists and policymakers alike. The Fourth Quarter and Consolidated Budget Implementation Report showed total borrowing reached ₦12.62 trillion, a steep 61.2 per cent jump over the ₦7.83 trillion originally planned.

The wider fiscal deficit, which climbed to ₦13.51 trillion against a projected ₦9.18 trillion, stemmed mainly from poor revenue collection rather than overspending. Government revenue totalled ₦20.98 trillion, missing its ₦25.88 trillion target by ₦4.90 trillion, while expenditure stayed close to budget at ₦34.49 trillion. The Budget Office confirmed that “the revenue and expenditure outturn of the Federal Government resulted in a fiscal deficit of ₦13.51tn in the 2024 fiscal year. This was ₦4.34tn (47.33 per cent) above the projected budget deficit estimate for the year.”

Domestic borrowing stayed within budget at ₦6.06 trillion, but foreign borrowing nearly doubled to ₦3.37 trillion, and the government secured an unplanned ₦3.19 trillion in budget support. Multilateral and bilateral loans hit ₦1.98 trillion, almost double the ₦1.05 trillion budgeted, while expected privatisation proceeds of ₦298.49 billion never materialised. New debt funded roughly 36 per cent of total spending.

Oil revenue disappointed badly, falling ₦4.93 trillion short as crude prices and output both underperformed. Non-oil revenue, however, beat targets by ₦5.29 trillion, lifted by stronger tax and customs collections. Debt servicing costs surged 52.71 per cent above budget to ₦12.36 trillion, while capital expenditure lagged, with only ₦3.27 trillion of ₦5.81 trillion released funds utilised by mid-2025. By December 2024, total public debt had climbed to ₦144.67 trillion, pushing the debt-to-GDP ratio to 61.22 per cent — far above safe thresholds.

Economists remain divided. CSA Advisory’s Aliyu Ilias warned that unchecked borrowing could fuel inflation, saying “The fact is that it has negative and positive impacts. But the negative impact is that we already have issues of debt service.” Others, including economist Olusegun Omisakin, argued that outcomes matter more than the borrowing itself. The debate intensified after the Emir of Kano, Muhammadu Sanusi II, questioned continued borrowing, prompting Finance Minister Taiwo Oyedele to defend the strategy, insisting: “A nation that borrows to finance productive assets generating returns above the cost of capital is behaving rationally.”

As Nigeria’s rising debt continues to spark national debate, experts agree stronger revenue generation will be essential going forward.

Should Nigeria slow its borrowing pace, or does infrastructure investment justify the risk?