Key Points

• Lawmakers challenge the FG on borrowing despite increased agency revenues.
• Borrowing is tied to budget deficits and National Assembly approvals.
• Agenda 2050 aims for significant economic growth amid fiscal adjustments.

The Federal Government has defended its borrowing practices, emphasizing that all loan requests align with approvals granted by the National Assembly. Speaking during a joint session of the Senate and House Committees on Finance, Budget, and National Planning, Finance Minister Wale Edun addressed concerns about continued borrowing despite revenue surpluses reported by several government agencies.

Lawmakers question persistent borrowing

The interactive session, led by Senator Sani Musa (APC, Niger East), focused on the 2025-2027 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP). During the meeting, agencies like the Nigeria Customs Service (NCS), Nigerian National Petroleum Company Limited (NNPCL), and Federal Inland Revenue Service (FIRS) revealed they collectively generated N36.95 trillion—well above revenue targets for the 2024 fiscal year.

Despite this revenue performance, lawmakers expressed concern over the government’s continuous foreign loan requests. Senator Adamu Aliero (PDP, Kebbi Central) questioned why the government continues borrowing despite the substantial revenue increases.

“What is the Federal Government doing with excess revenues generated by the various agencies in view of its unending request for foreign loan approval?” Aliero asked.

Government officials justify borrowing

Responding, Minister of Budget and Economic Planning Senator Atiku Bagudu clarified that borrowing remains essential to fund the N9.7 trillion budget deficit outlined in the N35.5 trillion 2024 budget.

“Even with increased revenue from some agencies, borrowing is still necessary to support the budget, particularly in areas like deficit financing and initiatives to assist the poorest and most vulnerable,” Bagudu explained. He also highlighted the government’s long-term Agenda 2050, which aims to achieve a GDP per capita of $33,000.

Finance Minister Wale Edun echoed Bagudu’s sentiments, reiterating that borrowing is part of the approved fiscal strategy. “The loans being requested are not arbitrary; they are included in the appropriation act passed by this assembly,” Edun said.

Revenue successes amid rising debt

As reported by Vanguard, the session highlighted a paradox: while agencies like FIRS, NCS, and NNPCL are exceeding revenue targets, the government’s borrowing needs persist. The lawmakers raised concerns about the rising debt profile and its implications for national sustainability.

The Federal Government assured lawmakers of its commitment to using the borrowed funds to address budgetary deficits and fund critical initiatives. However, as Nigeria aims for ambitious growth targets under Agenda 2050, balancing debt management and revenue generation remains a crucial challenge.