Nigeria's fiscal deficit widened to ₦13.51 trillion in the 2024 fiscal year after the Federal Government's revenue fell short of budget expectations, with weaker-than-projected crude oil earnings widening the financing gap despite stronger collections from non-oil sources.
According to an analysis of the 2024 Consolidated Budget Implementation Report, reported by BusinessDay, the deficit exceeded the budget estimate by ₦4.34 trillion, representing a 47.33 percent increase, forcing the government to depend more heavily on borrowing to finance its spending.
To fund the shortfall, the Federal Government raised ₦6.06 trillion through domestic borrowing, secured ₦3.37 trillion in foreign loans, obtained ₦1.98 trillion in multilateral and bilateral project-tied financing, and received ₦3.19 trillion in budget support.
The report attributed much of the fiscal pressure to weaker oil receipts. Gross oil revenue stood at ₦15.07 trillion, falling ₦4.93 trillion below the ₦19.99 trillion projected in the 2024 budget.
The shortfall reflected lower crude oil production and weaker international prices during the year. Average crude production was 1.54 million barrels per day, compared with the budget assumption of 1.78 million barrels per day, while average crude prices in the fourth quarter settled at $74.65 per barrel, below the budget benchmark of $77.96 per barrel.
In contrast, non-oil revenue outperformed expectations. Gross non-oil collections reached ₦16.09 trillion, exceeding the budget estimate of ₦10.81 trillion by 48.91 percent, supported by stronger receipts from Company Income Tax, Value Added Tax, Electronic Money Transfer Levy and Customs revenue.
Overall, the Federal Government generated ₦20.98 trillion in revenue during the year. Although this represented a 68.11 percent increase over the ₦12.48 trillion realised in 2023, it remained ₦4.89 trillion, or 18.92 percent, below the annual budget target.
Total expenditure amounted to ₦34.49 trillion, slightly lower than the approved budget of ₦35.06 trillion. Non-debt recurrent expenditure stood at ₦8.53 trillion, compared with a budget provision of ₦11.27 trillion.
Debt servicing, however, continued to weigh heavily on public finances. The report showed that ₦12.36 trillion was spent on debt obligations during the year, exceeding the budgeted ₦8.27 trillion by 52.71 percent.
Capital project implementation also fell below available funding. While ₦5.81 trillion was released and cash-backed for Ministries, Departments and Agencies (MDAs), utilisation stood at ₦3.27 trillion as of June 30, 2025, representing 81.91 percent of the amount made available.
Commenting on the report, Director-General of the Budget Office of the Federation, Tanimu Yakubu, said the government is pursuing reforms aimed at strengthening tax administration, reviewing fiscal incentives and expanding digital non-oil revenue sources to improve revenue generation.
He added that infrastructure, social sector investments and green financing remain central to the government's fiscal priorities, while efforts are ongoing to increase Nigeria's revenue-to-GDP ratio from about 8 percent to 18 percent.
Yakubu said sustaining fiscal stability would require broader revenue mobilisation, disciplined spending, improved project execution and stronger coordination across Ministries, Departments and Agencies to support long-term economic resilience and inclusive growth.