Nigeria’s 2024 Revenue Surges, But Budget Deficit Widens Amid Rising Expenditure — Budget Office

The Budget Office of the Federation has revealed that Nigeria recorded a significant rise in revenues in 2024, but the fiscal deficit also widened beyond government targets due to heavy spending pressures and unforeseen fiscal demands.

In its latest budget performance report released in Abuja on Friday, the Budget Office said that while the country achieved higher-than-expected revenue collections during the year, surging expenditure commitments, debt servicing costs, and expanded subsidy interventions placed enormous strain on public finances.

According to the report, total revenue inflow into the Federation Account in 2024 exceeded earlier projections, driven by improved oil production, higher global crude prices, and stronger non-oil tax performance. However, the office noted that these gains were offset by increased government spending on social welfare, infrastructure, and security operations across the country.

“The fiscal operations of the Federal Government in 2024 showed mixed outcomes,” the report stated. “While aggregate revenues performed impressively, surpassing previous estimates, expenditure outturns rose significantly above target, resulting in a fiscal deficit that exceeded the planned threshold.”

The report indicated that total federally collected revenue stood at approximately ₦18.9 trillion, representing about 115 percent of the prorated target for the year. Oil revenue contributed ₦7.2 trillion, benefiting from higher oil prices and improved production volumes averaging 1.55 million barrels per day, compared to 1.3 million in 2023. Non-oil revenue, including company income tax, value-added tax, and customs duties, also performed strongly, amounting to ₦11.7 trillion

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However, total expenditure during the period ballooned to ₦25.1 trillion, driven by large allocations to debt servicing, recurrent costs, and capital investments. This pushed the overall fiscal deficit to ₦6.2 trillion — higher than the ₦4.9 trillion projected in the 2024 Appropriation Act.

Budget Office Director-General, Ben Akabueze, explained that while government revenue mobilisation improved remarkably due to ongoing fiscal reforms and digitalisation of tax processes, expenditure pressures were exacerbated by inflationary trends, foreign exchange volatility, and increased security challenges.

“The government’s spending profile was influenced by urgent fiscal interventions to stabilise key sectors of the economy and protect vulnerable populations,” Akabueze said. “Rising energy costs, elevated food prices, and the need to sustain ongoing infrastructure projects also contributed to the increase in total expenditure.”

He further noted that the removal of fuel subsidies in 2023 had created both fiscal relief and social tension, prompting the government to introduce several palliative and social investment programs in 2024. These included cash transfers, transport support initiatives, and wage adjustments for public sector workers — all of which added to the recurrent expenditure bill.

The report also highlighted that debt servicing obligations remained one of the biggest challenges to fiscal stability, accounting for about 45 percent of total federal revenues. The government spent approximately ₦8.5 trillion on debt repayment and interest obligations during the year, compared to ₦6.9 trillion in 2023.

Analysts say the data underscores the structural fiscal imbalances that continue to constrain Nigeria’s economic growth. While revenue performance has improved due to better compliance and higher oil prices, public expenditure remains elevated, leaving little room for savings or investment in critical sectors like health and education.

Economic experts have urged the government to adopt stricter fiscal discipline and accelerate public finance reforms to reduce recurrent spending and improve capital allocation efficiency. They also called for an urgent review of the country’s borrowing strategy to ensure sustainability.

“The government must prioritize value for money in public spending,” said economist and policy analyst, Dr. Ayo Adediran. “Nigeria cannot continue to operate with such high fiscal deficits year after year. The focus should now be on expenditure rationalisation, plugging leakages, and improving transparency in project execution.”

Meanwhile, the Budget Office assured that it would continue to work with the Federal Ministry of Finance, the Central Bank of Nigeria (CBN), and other relevant agencies to strengthen fiscal oversight and improve budget credibility. Akabueze added that ongoing efforts to expand the tax base, enhance customs operations, and reform government-owned enterprises (GOEs) would yield greater fiscal stability in the coming years.

“The 2024 fiscal outcome reflects both the progress and challenges in our public finance management system,” he said. “We are moving in the right direction in terms of revenue generation, but expenditure control remains a key area requiring consistent discipline.”

The office also pledged to enhance transparency by publishing quarterly budget implementation reports and ensuring adherence to the provisions of the Fiscal Responsibility Act (FRA).

With the 2025 budget cycle already underway, fiscal experts expect the Federal Government to focus more on consolidating gains from ongoing reforms, addressing inefficiencies in spending, and curbing the rising cost of governance.

Although the 2024 fiscal year demonstrated stronger revenue performance, the widening deficit remains a reminder of the delicate balance between Nigeria’s growth ambitions and the realities of its fiscal constraints.