The Federal Government’s budget deficit surged by 47 percent to N13.51 trillion as crude oil earnings fell significantly short of budget estimate in 2024. This led to widened fiscal pressure as aggregate revenue also fell to N20.98 trillion in the period.
BusinessDay’s analysis of the Consolidated Budget Implementation Report for 2024 shows that gross oil earnings lagged behind projections by N4.93 trillion due to lower-than-budgeted crude production and falling global prices, forcing the government to rely heavily on debt to fund its budget deficit.
According to report, gross oil revenue in the period stood at N15.07 trillion, representing N4.93 trillon shortfall from N19.99 trillion budget estimate.
The report indicated that international crude oil prices averaged $74.65 per barrel during the fourth quarter, below the budget benchmark of $77.96 per barrel. Also, the average volume of crude oil produced daily was 1.54 million barrels per day, as against 1.78 million barrels per day budget assumption.
However, revenue from the non-oil sector exceeded budget target by 48.9 percent, to reach N16.09 trillion from N10.81 trillion budgeted.
The improved performance, accotding to budget office was attributed to stronger collections from Company Income Tax, Value Added Tax, Electronic Money Transfer Levy and Customs revenue.
It stated, ‘Total revenue inflow of the Federal Government stood at N20.98 trillion at the end of December 2024. This represents an N8.50 trillion (68.11 per cent) increase when compared to N12.48 trillion that was reported at the end of 2023, but N4.89 trillion (18.92 per cent) lower than the 2024 annual budget estimate.
‘Gross oil revenue stood at N15.07 trillion representing a N4.93 trillion (24.65 percent) decline from N19.99 trillion projected in the 2024 Budget. It was however N6.71 trillion (80.83 percent) above the actual gross oil revenue of N8.35 trillion generated in the corresponding period of 2023.
‘Gross non-oil revenue of N16.09 trillion received in 2024 represents an increase of N5.29 trillion (48.91 percent) above the annual estimate of N10.81 trillion.’
On expenditure side, the report showed that the federal government’s spendings were below 2024 budget estimate of N35.06 trillion as the total expenditure stood at N34.49 trillion
Non-debt recurrent expenditure in the period amounted to N8.53 trillion, below the budget estimate of N11.27 trillion, while debt service obligations increased significantly during the year.
According to the report, total debt expenditure reached N12.36 trillion, exceeding the budgeted N8.27 trillion by 52.71 per cent.
It stated, ‘A total of N12.36 trillion was committed as total debt expenditure for the year, 52.71 per cent above the N8.27 trillion budgeted for the period.’
The report showed that out of the N5.81 trillion released and cash-backed for capital projects only N3.27 trillion was utilized by Ministries, Departments and Agencies as of June 30, 2025.
It stated, ‘A total of N5.81tn was released and cash-backed to MDAs for their 2024 capital projects and programmes in 2024 fiscal year. Available fiscal data revealed that only N3.27tn (81.91 per cent) of the total amount released and cash-backed was utilized by MDAs.’
The revenue and expenditure outturn of the Federal Government resulted in a fiscal deficit of N13.51 trillion in the 2024 fiscal year. This was N4.34 trillion (47.33 percent) above the projected budget deficit estimate for the year and also above the N10.55 trillion deficit recorded in the corresponding period of 2023.
The deficit according to the budget office, was financed through multi-lateral/bilateral project-tied loans of N1.98 trillion, domestic borrowing of N6.06 trillion, foreign borrowing of N3.37 trillion and budget support of N3.19 trillion in the period under review.
Commenting on the report, Tanimu Yakubu, Director General, Budget Office of the Federation said that the government is implementing revenue reforms focus on improving tax administration, reviewing fiscal incentives, and enhancing digitalized non-oil revenue sources.
According to him, infrastructure and social sector investments remain priorities, alongside green finance strategies. He added that efforts to grow the revenue-to-GDP ratio from -8 percent to 18 percent are critical for sustainability.
‘Despite global and domestic pressures, the 2024 Budget was implemented with appreciable level of fiscal discipline. Key priorities going forward include enhanced fiscal discipline, a broadened revenue base, rationalized spending, and strategic capital prioritization.
‘The report underscores the importance of accountability, effective project management, and continued reform to deliver economic resilience and inclusive growth. As we look ahead, sustaining the gains of 2024 requires enhanced coordination across MDAs, effective implementation of the Medium-Term Expenditure Framework, and a relentless focus on accountability, efficiency, and inclusive development,’ he said.