Nigeria’s fiscal outlook remains tight as the Federal Government allocated 69 per cent of its total 2024 revenue to debt servicing, according to the latest Budget Implementation Report (BIR) from the Budget Office of the Federation (BOF).
The report shows that out of N19.354 trillion earned during the year, N11.887 trillion was spent on servicing debt, leaving limited resources for infrastructure and other development priorities.
While this marks an improvement over 2023, when debt service consumed 78 per cent of revenue, analysts caution that the ratio remains well above recommended levels.
“The World Bank and IMF suggest that debt service should not exceed 30–40 per cent of revenue for developing countries. Nigeria’s 69 per cent means nearly seven out of every ten naira earned goes to debt repayment, leaving minimal fiscal space for growth-oriented spending,” said Prof. Godwin Oyedokun, an accounting and finance expert at Lead City University, Ibadan.
The Federal Government had projected N27.5 trillion in expenditure against N18.32 trillion in expected revenue, resulting in a projected fiscal deficit of N9.18 trillion. However, actual revenue slightly outperformed projections, hitting N19.354 trillion — N1.03 trillion above target. Expenditure also overshot the budget, reaching N28.726 trillion, which is N1.23 trillion higher than projected.
Oil revenue surged to N6.180 trillion in 2024, up from N2.430 trillion in 2023, while non-oil revenue rose to N4.557 trillion from N3.312 trillion. Independent revenue from government enterprises, grants, and education taxes contributed N8.317 trillion, compared to N6.743 trillion the previous year. Overall, revenue grew 149 per cent year-on-year, which officials attributed to improved collections and stronger oil receipts.
Out of the N28.726 trillion spent in 2024, N11.887 trillion went to debt service, N7.312 trillion to non-debt recurrent expenditure, and N7.789 trillion to capital projects — representing 22 per cent of total spending, up from 18 per cent in 2023. Transfers accounted for N1.738 trillion.
Despite the slight improvement in capital allocation and reduction of recurrent spending from 73 per cent to 72 per cent, experts argue that Nigeria’s spending pattern remains heavily skewed toward debt obligations and overheads, limiting long-term growth prospects.
Prof. Oyedokun warned that the fiscal path remains unsustainable despite better revenue performance. He emphasized that capital spending must rise to at least 30–40 per cent of total expenditure to address Nigeria’s infrastructure deficits in roads, power, education, and healthcare.
“Low capital investment constrains productivity, job creation, and competitiveness,” he said, calling for urgent reforms to redirect resources toward development projects and reduce recurrent costs.
