The impressive revenues generated in 2024 raised questions among lawmakers, who queried the government’s continued borrowing
There was mild confusion at the National Assembly on Monday over the federal government’s continued borrowing despite the fact that revenue generating agencies have exceeded their targets for the fiscal year 2024.
This happened during an interactive session by the joint national assembly committees on finance, national planning and economic affairs on the 2025-2027 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) with agencies of the government.
OrderPaper recalls that President Bola Tinubu last Tuesday, transmitted the MTEF and FSP to the national assembly for consideration and passage. According to the MTEF, the proposed budget for 2025 is ₦47.9tn, with new borrowings of $2.2bn included to partly finance the ₦9.7tn budget deficit for the 2024 fiscal year.
The MTEF is a three-year rolling plan used as a framework for the annual budget.
Impressive figures of revenues amidst borrowings
During the interactive session which held at the senate wind of the national assembly, several revenue-generating agencies presented their achievements for the 2024 fiscal year and projections for the upcoming ₦47.9tn trillion 2025 budget, revealing that many had exceeded their targets.
The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, disclosed that the company had already exceeded its ₦12.3 trillion target for 2024 by generating ₦13.1 trillion.
“For the 2025 fiscal year, N23.7 trillion is projected by NNPCL to be remitted into the federation account,” he said.
The Comptroller-General of the Nigeria Customs Service (NCS), Bashir Adeniyi, reported that by September 30, 2024, the agency had collected ₦5.352 trillion in revenue, surpassing its full-year target of ₦5.09 trillion. He noted that for 2025, the NCS has set a revenue projection of ₦6.3 trillion, with additional 10% increases planned for 2027.
On his part, the Chairman of Federal Inland Revenue Service (FIRS), Zacch Adedeji revealed that FIRS had outperformed all tax targets. For instance, Company Income Tax collections according to him, reached ₦5.7 trillion, surpassing the ₦4 trillion target, while Education Tax revenue soared to ₦1.5 trillion against a modest ₦70 billion target. Overall, ₦18.5 trillion had been collected by September 2024, nearly hitting the ₦19.4 trillion annual target.
“All in all, out of N19.4 trillion targeted for 2024 fiscal year, N18.5trillion was realised as at the end of September, which clearly shows that the target will be far exceeded by the end of the year,” he said.
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Lawmakers question borrowing despite surpluses
The impressive figures raised questions among lawmakers, who expressed concern about the government’s continued borrowing despite significant revenue surpluses. Senator Adamu Aliero (PDP, Kebbi Central) was among those who questioned this approach, asking, “what is the Federal Government doing with the excess revenues generated by the various agencies, in view of its unending request for foreign loan approval?”
In response, Adedeji explained that borrowing provisions are embedded in the appropriation act approved by the National Assembly. He emphasised that surpassing revenue targets does not eliminate the need to activate the borrowing components of the budget.
He said, “Borrowing is part of what have been approved by the National Assembly for the federal government, meaning that the executive borrows based on approval of the legislature.
“The fact that we meet revenue targets and even surpassed them as revenue generating agencies does not mean that the borrowing component of an appropriation law , passed by the National Assembly should not be activated,” he said.
The Minister of Budget and Economic Planning, Sen. Atiku Bagudu, supported this view, stating that borrowing is essential to address the ₦9.7 trillion deficit in the ₦35.5 trillion 2024 budget. Bagudu also highlighted the importance of borrowing for long-term developmental goals, such as Nigeria’s Agenda 2050, which aims to achieve a GDP per capita of $33,000.
“Despite revenue targets surpassing by some of the revenue generating agencies, government still needs to borrow for proper funding of the budget particularly in the area of deficit and productivity for the poorest and most vulnerable. We have a long term development perspective plan agenda 2050 aiming at GDP per capital of $33,000,” he explained.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, reiterated that borrowing is necessary to fund critical areas of the budget, particularly for infrastructure and social programs targeting vulnerable populations.
