Federal Gov’t Defends Borrowings Amid Surplus Revenue Reports
The federal government has defended its borrowing plans, stating that they were based on approvals from the National Assembly, despite revenue-generating agencies surpassing their annual targets.
This was revealed on Monday in Abuja during an interactive session between revenue-generating agencies and the National Assembly’s Joint Committees on Finance, Budget, and National Planning. The discussions focused on the 2025–2027 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) sent to the National Assembly by President Bola Tinubu.
LEADERSHIP reports that the 2025–2027 MTEF/FSP contains the parameters projections for the proposed 2025 budget.
The revenue-generating agencies, in their separate presentations on their 2024 budget performances and revenue projections for the proposed ₦49.7 trillion 2025 budget, reported exceeding their 2024 revenue targets.
The Comptroller-General of the Nigeria Customs Service (NCS), Bashir Adeniyi, was the first to make presentation.
He stated that as of September 30, 2024, the Customs Service had generated ₦5.352 trillion in revenue, surpassing its ₦5.09 trillion target for the entire 2024 fiscal year.
He added that the revenue target for 2025 was projected at ₦6.3 trillion, with a 10% increase planned for 2026 and another 10% increase for the 2027 fiscal year.
The group chief executive officer (GCEO) of the Nigerian National Petroleum Company Limited (NNPCL), Mr. Mele Kyari, reported that the oil company had exceeded its ₦12.3 trillion revenue projection for 2024 by already generating ₦13.1 trillion.
“For the 2025 fiscal year, NNPCL projects ₦23.7 trillion to be remitted into the Federation Account,” he stated.
Similarly, the chairman of the Federal Inland Revenue Service (FIRS), Zacch Adedeji, informed the legislative committees that the agency had surpassed revenue targets across various tax components.
He noted, “For Company Income Tax, ₦4 trillion was targeted, but ₦5.7 trillion has been realized. For Education Tax, while ₦70 billion was targeted, ₦1.5 trillion has been collected.”
“Out of the ₦19.4 trillion revenue target for the 2024 fiscal year, ₦18.5 trillion had already been realized by the end of September, indicating that the target will be far exceeded by year-end.”
The submissions amazed lawmakers, led by Senator Sani Musa. They questioned why the Federal Government continued to seek foreign loans despite the significant increases in internally generated revenue (IGR).
Senator Adamu Aliero (PDP, Kebbi Central) asked: “What is the Federal Government doing with the excess revenue generated by various agencies, given its persistent requests for foreign loan approvals?”
Responding, the FIRS chairman explained that the loans being requested by the Executive arm of government were already part of the Appropriation Act.
“Borrowing is part of what has been approved by the National Assembly for the Federal Government. This means the Executive borrows based on the legislature’s approval.
“The fact that we meet and even surpass revenue targets as revenue-generating agencies does not negate the borrowing component of an appropriation law passed by the National Assembly,” he said.
Supporting this, the minister of Budget and Economic Planning, Atiku Bagudu, reminded lawmakers that borrowing plans outlined in the ₦35.5 trillion 2024 budget were designed primarily to fund the ₦9.7 trillion budget deficit.
“Even though some revenue-generating agencies are surpassing their targets, the government still needs to borrow to properly fund the budget, particularly in areas related to the deficit and providing for the poorest and most vulnerable.
“We have a long-term development perspective under Agenda 2050, aiming for a GDP per capita of $33,000,” he said.
The minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, also emphasized that borrowing remains necessary for proper budget funding, despite increased revenues.
However, the Nigeria Immigration Service faced criticism during the session over a highly skewed Public-Private Partnership (PPP) arrangement for passport production. The agreement granted 70% of the proceeds to a consultancy firm, leaving only 30% for the government.
The Joint Committee Chairman, Senator Sani Musa, directed the Nigeria Immigration Service to submit all documents related to the controversial PPP arrangement by the end of the week.
“This so-called PPP arrangement must be reviewed or canceled because Nigeria and Nigerians are being seriously shortchanged,” he stated.
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