In a revealing session before the Senate Joint Committees on Finance and National Planning and Economic Affairs, Nigeria’s economic leadership made a striking admission: despite exceeding revenue targets across multiple agencies, the federal government still requires substantial borrowing to fund its ambitious budget plans. This development has sparked intense debate about the nation’s fiscal strategy and mounting debt profile.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, defended the government’s position during discussions on the 2025-2027 Medium-Term Expenditure Framework and Fiscal Strategy Paper. His assertion that additional borrowing remains necessary, even as key agencies report surpassing their revenue targets, highlights the complex financial challenges facing Africa’s largest economy.
The government’s narrative centers on what it terms “productive and efficient” borrowing, with Edun emphasizing the dual focus on infrastructure development and social services. Not just infrastructure but also social services, health services, education and intervention in terms of social safety net to help the poorest and most vulnerable,” the Finance Minister explained, outlining the government’s commitment to comprehensive national development.
Supporting this stance, Minister of Budget and Economic Planning, Senator Atiku Bagudu, provided context for the borrowing plans within the N35.5 trillion 2024 budget framework. The immediate need, he explained, is to address the N9.7 trillion deficit, while maintaining sight of ambitious long-term goals, including achieving a GDP per capita of $33,000 under the Agenda 2050 development plan.
However, this push for increased borrowing comes against a backdrop of impressive revenue performance across key government agencies. The Nigerian National Petroleum Company Limited (NNPCL), under the leadership of Mele Kyari, has already exceeded its 2024 projection of N12.3 trillion, reporting revenue of N13.1 trillion. Looking ahead, the NNPCL projects remittances of N23.7 trillion to the federation account for the 2025 fiscal year.
Similarly, the Nigeria Customs Service, led by Comptroller General Bashir Adeniyi, has surpassed expectations, generating N5.352 trillion against a target of N5.09 trillion for 2024. The service has set increasingly ambitious targets for the coming years, with projections showing 10% annual increases through 2027.
The Federal Inland Revenue Service (FIRS) has also reported exceeding its targets across various tax components, contributing to the overall positive revenue picture. These achievements have led some observers to question the necessity of additional borrowing, with prominent voices in key institutions expressing skepticism about the government’s approach.
Among the critics, the Economic and Financial Crimes Commission (EFCC) has taken a strong stance. EFCC Chairman Ola Olukoyede, reporting recoveries of over N197 billion since January 2024, argued that with proper management of resources and appropriate collections from International Oil Companies (IOCs), Nigeria could adequately fund its budget without resorting to additional borrowing.
The debate intensified following the Senate’s recent approval of President Bola Tinubu’s ₦1.77 trillion ($2.2 billion) loan request, intended to partially finance the 2024 budget deficit. This decision has drawn sharp criticism from opposition figures, including former Vice President Atiku Abubakar, who characterized the loans as “bone-crushing” to Nigerians and questioned their necessity and utilization.
Atiku’s criticism extends beyond the immediate financial implications, pointing to concerns about corruption and questioning the transparency of the borrowing process. Citing a report from budget watchdog Budgit, he raised alarms about the integrity of the 2024 budget structure and accused the National Assembly of complicity in approving what he views as problematic borrowing.
The situation presents a paradox in Nigeria’s fiscal management: despite demonstrable improvements in revenue generation across multiple sectors, the government maintains that borrowing remains essential for achieving its development objectives. This stance raises important questions about the sustainability of Nigeria’s debt strategy and the efficiency of resource allocation in one of Africa’s most dynamic economies.
As Nigeria navigates these complex fiscal waters, the challenge lies in balancing the immediate needs for development funding against the long-term implications of mounting debt. The government’s ability to demonstrate effective utilization of borrowed funds and achieve tangible development outcomes will be crucial in justifying its current approach to national finance management.
The ongoing debate underscores the need for greater transparency in public finance management and a more comprehensive approach to leveraging improved revenue performance for sustainable economic development. As Nigeria moves forward with its ambitious development agenda, the effectiveness of its borrowing strategy and the prudent use of resources will remain under intense scrutiny from both domestic and international observers.
