FG Defends Borrowing Despite Surpassing Revenue Targets

***Says their productuve borrowing follows NASS approvals

***NNPCL, FIRS, Customs surpass 2024 Revenue Projections

The Federal Government on Monday justified its continued borrowing, citing legislative approvals and budgetary requirements, even as revenue-generating agencies reported significant surpluses for the 2024 fiscal year.
This was disclosed during an interactive session between the government’s revenue agencies and the National Assembly Joint Committees on Finance, Budget, and National Planning, with focus on the 2025-2027 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).
Key agencies that provided updates on their performance and projections.

The Nigerian Customs Service (NCS) Comptroller-General, Bashir Adeniyi revealed that by September 30, 2024, the service had generated ₦5.352 trillion, surpassing its annual target of ₦5.09 trillion.
For 2025, the Customs Service projected revenues of ₦6.3 trillion, with annual 10% growth for subsequent years.
NNPCL Group Chief Executive Officer, Mele Kyari stated that the company had exceeded its 2024 revenue target of ₦12.3 trillion by generating ₦13.1 trillion.
The company projected ₦23.7 trillion in revenues for 2025.
Federal Inland Revenue Service (FIRS) Chairman, Zacch Adedeji reported surpassing targets across several tax streams.
For instance, he indicated that Company Income Tax generated ₦5.7 trillion against a target of ₦4 trillion, while Education Tax reached ₦1.5 trillion, far exceeding its ₦70 billion target.
Overall, he said, FIRS had realized ₦18.5 trillion out of a projected ₦19.4 trillion by September 2024.
The stellar revenue performance prompted lawmakers to question the Federal Government’s continued reliance on borrowing.
Senator Adamu Aliero (PDP, Kebbi Central) asked why the government still sought foreign loans despite exceeding revenue targets.

FIRS Chairman Adedeji explained that borrowing is part of the appropriation law passed by the National Assembly.
“Borrowing is part of what has been approved by the National Assembly for the Federal Government. Surpassing revenue targets does not negate the borrowing component of the law,” he said.
Minister of Budget and Economic Planning Senator Atiku Bagudu added that the ₦9.7 trillion deficit in the ₦35.5 trillion 2024 budget necessitated borrowing to fund critical areas.
He also noted the government’s long-term plan under Agenda 2050, which aims for a GDP per capita of $33,000.
Minister of Finance and Coordinating Minister of the Economy Mr. Wale Edun emphasized the need for borrowing to address funding gaps, especially for initiatives targeting the poorest and most vulnerable.
“Just today, the National Bureau of Statistics, by the Statistician General, announced that GDP growth in the third quarter was 3.46, less say, for the sake of round numbers, 3.5%.
“That is about the rate of population improvement. That means that the GDP per capital is increasing, it’s improving. The economy is moving in the right direction.
“Inflation is too high and that is why interventions are being made particularly for the most vulnerable. Let me just summarize the change by saying that in Nigeria, for the first time in four decades, we have market prices of the petroleum products being determined by market forces because of the local refinery which is not only producing just PMS but also diesel, or jet fuel.
“Well, it’s producing raw materials for industry. It’s producing raw materials for agriculture

“In addition, we have market pricing of foreign exchange. And of course, the two are related. For the first time in 40 years, no Nigerian can wake up and think that his way to fortune and the quickest path he can take to getting rich is by getting an allocation of foreign exchange from the Central Bank of Nigeria (CBN) Likewise, no Nigerian can wake up and feel that his quickest path to riches is to look for a subsidized allocation from the Nigerian National Petroleum Corporation Limited (NNPCL) and make money.
‘”So, the incentives are for Nigerians now to add value in agriculture and in manufacturing and it is against that backdrop that today we have examined in details, the budget for 2025 and the medium-term expenditure framework. And it is important to emphasize that even as we are having these successes, at the macro economic level, there is difficulty and we need to be careful and we need to save the cost. When we look at the figures, one of the biggest figures that was read out by the chairman senate committee on finance, on debt servicing and that is because in June 2023, the key interest rate was 3.2 %. Today, it is 24.3%
“So when you have a shrinking of interest rates, and of course you have deficit financing, that is where, care needs to be taken. And that is where the fiscal tightness, the limited ability to spend at all levels to intervene in healthcare, social services, education, and so forth.
“So by the time you have market pricing of petroleum products, market pricing of foreign exchange, it will send all the right signals and then as well as we have to be financially disciplined to pay our debts, to pay our wages.
“You have the basis of an economy that can grow, a society that can develop, and people that can be proud of.”
The Director General Budget office Tanimu Yakubu in his presentation outlined key factors influencing Nigeria’s medium-term economic outlook, highlighting the impacts of geopolitical tensions, domestic challenges, and structural vulnerabilities.
On the Revenue Performance of the 2024 Budget Implementation, he said aggregate revenue inflow as of August 31, 2024, was ₦12.74 trillion, 73.8% of the pro-rated target of ₦17.25 trillion.
Explaining further he said Non-oil revenue surpassed expectations due to significant reforms by the current administration.
On expenditure he said actual spending was ₦16.98 trillion (against a pro-rated target of ₦23.37 trillion).

“Debt servicing consumed ₦7.41 trillion, while personnel costs, including pensions, stood at ₦3.73 trillion. ₦3.65 trillion was released for capital projects, with more expected in Q4.

On Key Projections (2025–2027) for Oil Benchmarks he said Oil price is assumed at $75–$77.96 per barrel adding that Oil production is expected to rise from 1.78 mbpd in 2024 to 2.35 mbpd in 2027.
He said exchange rate projected to rise from ₦800/$1 (2024) to ₦1,400/$1 throughout the period while Inflation expected to decline from 32% in 2024 to 10.04% by 2027.
“Real GDP growth expected to improve from 3.8% in 2024 to 5.5% by 2027. Non-oil GDP projected to grow from ₦233.89 trillion (2024) to ₦409.3 trillion (2027). Oil GDP expected to triple from ₦12.3 trillion (2024) to ₦48.7 trillion (2027).
On Revenue Projections (2025) he he indicated that Total projected revenue is ₦34.8 trillion (₦19.6 trillion from oil, ₦15.2 trillion from non-oil sources).
Federal Government’s share: ₦28.3 trillion; States: ₦17.3 trillion; Local Councils: ₦13.14 trillion.
On Risks and Challenges he projected that there will be Non-performance of some revenue streams, e.g., 35% below-target oil and gas revenue by August 10, 2024 and dependency on oil revenues, which account for 69% of federation account inflows.
The DG emphasized the need for fiscal discipline, efficient resource allocation, and mitigation

The Nigeria Immigration Service was faced criticism for an allegedly lopsided Public-Private Partnership (PPP) agreement on passport production.
The arrangement allocated 70% of proceeds to a consultancy firm while the government retained only 30%.
Committee Chairman Senator Sani Musa ordered the service to submit all related documents and called for a review or cancellation of the agreement.

“The so-called PPP arrangement must be reviewed or canceled because Nigeria and Nigerians are seriously being short-changed,” he said.
The session underscored the paradox of increased revenues alongside persistent borrowing, prompting lawmakers to call for enhanced fiscal discipline and transparency in budget implementation.
The government reiterated its commitment to meeting budgetary needs while addressing concerns over