Nigeria’s fiscal deficit rose sharply to N13.51 trillion in 2024, exceeding the government’s target and pushing the deficit-to-GDP ratio above the legal threshold set by the Fiscal Responsibility Act (FRA) 2007.
This is according to the latest budget implementation report released by the Budget Office of the Federation.
The report revealed that in the 2024 Fiscal Framework, the quarterly fiscal deficit was initially projected at N2.29 trillion, excluding Government-Owned Enterprises (GOEs) and multi-lateral or bi-lateral project-tied loans amounting to N262.98 billion.
However, actual figures far exceeded this estimate as fiscal pressures mounted during the year.
According to the Budget Office, inflows and outflows of funds during the fourth quarter resulted in a deficit of N7.17 trillion — a staggering N4.88 trillion or 212.68 per cent higher than the prorated budget projection for the period.
“Overall, a total of N13.51 trillion deficit was recorded in 2024, representing a budget to GDP ratio of 3.62 per cent, which is above the target rate of 3.0 per cent as stipulated in the FRA 2007,” the Budget Office stated.
According to the report, “the deficit was financed through N1.98 trillion Multi-lateral/Bilateral Project-tied Loan, N6.06 trillion Domestic Borrowing, N3.37 trillion Foreign Borrowing and N3.19 trillion Budget Support.”
Nigeria’s fiscal deficit is expected to rise to 4.7% of Gross Domestic Product (GDP) in 2025, according to the latest International Monetary Fund (IMF) report.
According to the IMF report, “In the baseline, staff projects a consolidated fiscal deficit of 4.7 per cent of GDP in 2025. This is higher than the budget, owing to lower oil prices and production, and already reflects lower-than-budgeted capital expenditure.”
Nigeria owes countries like China, France, Germany, and Japan (bilateral debts) and multilateral institutions like the World Bank, Islamic Development Bank (IsDB), and the African Development Bank (AfDB).
In terms of local debts, Nigeria owes local bond creditors via the sale of FGN Bonds, Treasury Bills, Sukuk Bonds, Green Bonds and Promissory Notes.