The Nigerian Senate has raised concerns over the federal government’s decision to secure loans for the 2024 budget, despite surpassing revenue targets from key agencies such as the Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS), and Nigerian National Petroleum Company Limited (NNPCL).
Recent reports indicate that the NCS generated ₦5.352 trillion in revenue, exceeding its ₦5.09 trillion target for 2024. Similarly, the FIRS surpassed its ₦19.4 trillion revenue projection by 15%, collecting ₦5.7 trillion from company income taxes alone. The NNPCL reported a daily oil production rate of 1.8 million barrels, just below the 2024 projection of 2.06 million barrels per day.
Despite these strong performances, the federal government has taken out a $2.2 billion loan (₦1.7 trillion) to partially finance development projects in the 2024 budget. This move has prompted questions from lawmakers, who argue that Nigeria’s internally generated revenue (IGR) appears sufficient to meet the country’s fiscal needs.
During a session chaired by Senate Finance Committee Chairman, Sen. Sani Musa, and House Finance Committee Chairman, Hon. James Faleke, lawmakers expressed their dissatisfaction.
“Why is the government borrowing when we have so much revenue?” Sen. Adamu Aliero queried. He added, “We’ve collected over ₦51 trillion so far, yet the 2024 budget was pegged at ₦35 trillion. What is happening with the excess revenue?”
Faleke also questioned the justification for borrowing. “If we’ve exceeded our IGR target, why continue borrowing simply because it was budgeted?” he asked.
Senate Chief Whip, Sen. Mohammed Monguno, highlighted the poor implementation of the 2024 budget, noting that as of November, its performance was only 30%. “With such poor execution, why are we approving more loans while the 2025 budget is already on its way?” Monguno lamented.
Defending the government’s stance, Finance Minister Wale Edun argued that borrowing is necessary for economic growth and bridging budget deficits. “Although revenue collection has improved, we’re still below the 2024 projections. Borrowing, when used effectively, stimulates growth and production,” Edun stated.
FIRS Chairman, Zacch Adedeji, also emphasized that borrowing is an integral part of the budget structure. “You approved this borrowing in the 2024 budget. Borrowing and revenue collection are not contradictory,” he said.
However, agencies like the Economic and Financial Crimes Commission (EFCC) and the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) supported the lawmakers’ concerns. RMAFC Chairman, Dr. M.B. Shehu, noted that Nigeria could eliminate its reliance on loans with stricter fiscal discipline and better management of remittances, especially from the NNPCL.
EFCC Secretary, Mr. Mohammed Haman Joda, revealed that the commission recovered ₦197 billion this year but stressed that diligent revenue collection could drastically reduce the need for borrowing. He particularly urged the NNPCL to address outstanding debts from International Oil Companies (IOCs).
As the borrowing debate continues, senators and stakeholders have called for greater transparency and strategic management of Nigeria’s fiscal policies to reduce the nation’s growing debt burden.
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