Nigeria’s fiscal position came under intense pressure in 2024 with the Federal Government’s budget deficit hitting a record N13.51 trillion, exceeding its target by more than 47 per cent.

This record is despite stronger economic growth and a surge in non-oil revenue.

Analysis of the Fourth Quarter and Consolidated Budget Implementation Report released by the Budget Office of the Federation (BOF), showed that the Federal Government generated N20.98 trillion in revenue against total expenditure of N34.49 trillion, leaving a financing gap that was funded through domestic borrowing, foreign loans, multilateral project financing and budget support.

The report presents a mixed picture of Nigeria’s economy, showing that while real gross domestic product (GDP) expanded by 3.84 per cent in the fourth quarter and annual growth rose to 3.40 per cent, inflation remained sticky at 34.8 per cent, food inflation climbed to almost 40 per cent, and oil revenue continued to underperform.

According to the report, gross oil revenue was N15.07 trillion, dropping N4.93 trillion below budget projections, largely because crude oil prices averaged below the benchmark and production remained below target.

However, the report shows that non-oil revenue outperformed expectations, with collections reaching N16.09 trillion, higher than budget estimates by nearly 49 per cent, driven essentially by company income tax (CIT), value added tax (VAT), Electronic Money Transfer Levy (EMTL) and Customs collections, suggesting that ongoing tax reforms are beginning to yield results.

A critical feature of the report is the fact that Nigeria is bleeding through high debt servicing which continues to consume a significant share of public resources.

According to the report, the government spent N12.36 trillion servicing debt during the year. This is more than 52 per cent above what was budgeted. Nigeria’s debt-to-GDP ratio climbed to 61.22 per cent, above both the country’s 40 per cent benchmark and the 56 per cent reference level for comparable economies.

The report shows that although the government released N5.81 trillion for capital projects, only 81.91 per cent of the cash-backed funds had been utilised by ministries, departments and agencies (MDAs), raising questions about project execution and implementation capacity.

It said while economic reforms are improving growth and boosting tax revenue, Nigeria remains heavily constrained by weak oil earnings, high inflation, rising debt obligations and persistent fiscal deficits.

High debt profile has been Nigeria’s major undoing. As of the fourth quarter 2024, the country’s total public debt was N144.67 trillion. That figure has risen to N159.27 trillion as of the fourth quarter of 2025, an increase of N14.60 trillion or 10.09 per cent in a space of one year.