Nigeria’s fiscal pressures deepened in 2024 as the Federal Government’s debt service obligations and rising deficits strained public finances, according to the Q4 2024 Budget Implementation Report released by the Budget Office of the Federation.
The report showed that the government spent N12.36 trillion on debt servicing during the year, a figure 52.71% higher than the N8.27 trillion budgeted and accounting for 35.26% of the total N35.05 trillion national budget.
In addition, the country recorded a fiscal deficit of N13.51 trillion, surpassing the year’s projection by N4.34 trillion (47.33%), and also exceeding the N10.55 trillion deficit recorded in 2023.
Deficit Financing
The 2024 deficit was financed through several channels:
Multilateral and bilateral project-tied loans: N1.98 trillion
Domestic borrowing: N6.06 trillion
Foreign borrowing: N3.37 trillion
Budget support funds: N3.19 trillion
Despite these measures, the country’s total public debt-to-GDP ratio rose sharply to 61.22% by December 2024 — well above Nigeria’s self-imposed limit of 40% and the 56% international benchmark for similar economies.
Revenue Performance
The report also indicated that total revenue inflow stood at N20.98 trillion at the end of 2024 — a 68.11% increase over the N12.48 trillion recorded in 2023, but still N4.89 trillion (18.92%) below the budgeted estimate.
While revenue growth was notable, analysts warn that much of the increase was absorbed by ballooning debt obligations, limiting fiscal room for capital investment and social spending.
Expenditure Breakdown
On the expenditure side, total government spending reached N34.49 trillion, slightly below the N35.05 trillion projected, but significantly higher than the N23.04 trillion expended in 2023 — marking a 49.7% year-on-year increase.
Of this amount:
N8.53 trillion went to non-debt recurrent expenditure, which was 24.29% below the budgeted N11.27 trillion, but 20.48% higher than 2023 levels.
N6.72 trillion was spent on recurrent debt in the fourth quarter alone, an increase of 37.72% above projections.
N1.32 trillion was used to service domestic debt in the same period, marginally 0.53% below estimates.
Meanwhile, statutory transfers totalled N435.70 billion during the fourth quarter.
Capital Spending
The report revealed that N5.81 trillion was released and cash-backed for capital projects and programmes across ministries, departments, and agencies (MDAs) in 2024.
However, by June 30, 2025, only N3.27 trillion (representing 81.91%) of the disbursed capital funds had been utilised, highlighting challenges in project execution and budget absorption capacity among MDAs.
Fiscal Outlook
With debt servicing costs and deficits consuming a growing share of national expenditure, fiscal experts warn that Nigeria’s borrowing pattern could heighten risks to macroeconomic stability unless reforms improve revenue generation, debt sustainability, and capital utilisation.
The Budget Office’s findings underscore the urgent need for structural fiscal discipline, especially in public spending and project delivery, to align future budgets with realistic financing strategies.
