Nigeria’s Federal Government is facing a significant challenge as it prepares to present the 2025 national budget. The budget is heavily reliant on borrowings, which has raised concerns about the nation’s rising debt stock.
As of November 2024, the government has borrowed N2.93 trillion, exceeding its target by 49%. This trend suggests that the government may end up borrowing N10 trillion in 2024, a whopping 67% above its initial target.
The 2025 budget deficit is expected to be financed through domestic and external borrowings totaling N9.22 trillion, an 18% increase from the previous year. This has sparked worries about the country’s ability to manage its debt.
To put this into perspective, Nigeria’s domestic debt stock stood at N66.957 trillion in the first half of 2024, representing a 38.6% growth from the previous year.
The government’s reliance on borrowings to finance its budget raises important questions about the long-term sustainability of this approach. As the government prepares to present the 2025 budget, it’s essential to consider the potential implications of this borrowing trend on Nigeria’s economic future.