Ahead of President Tinubu’s presentation at the National Assembly on Tuesday, 17 December, the 2025 national budget is tipped to be high on funding to service lending as FG’s domestic borrowing target for 2024 exceeds the threshold by N4 trillion, about 67 per cent above the budgeted figure.
These are coming despite the widespread concerns over the continued rise in the nation’s debt stock.
Details of the government’s domestic borrowing activities 11 months before November 2024 indicate borrowing over N2.93 trillion, or 49 per cent above the target as of November.
In reports, FG had borrowed N8.93 trillion from domestic investors in the eleven months from January to November, 11M’24, as against the N6 trillion planned for the whole year.
With this trend and other borrowing activities currently being executed, the FG may end up borrowing N10 trillion in 2024, 67 per cent above the target for the year.
These comes against the backdrop of FG’s plan to finance the 2025 budget deficit with domestic and external borrowings amounting to N9.22 trillion, 18 % higher than the N7.808 trillion for 2024.
The 2025 deficit budget according to the Federal Ministry of Budget and Economic Planning report would be financed “by new foreign and domestic borrowings of N9.22 trillion, N312.33 billion from Privatization Proceeds, and N3.55 trillion draw-downs on existing multilateral/bilateral project-tied loans. The deficit will largely be financed by domestic borrowings, considering the narrow window for external financing.”
Breakdown of data from the Debt Management office, DMO, and the Central Bank of Nigeria, CBN, showed that in the third quarter, Q3,24 the Federal Government borrowed N2.134 trillion from domestic investors through the Nigeria Treasury Bills, NTBs, FGN Bonds, FGN Savings Bonds.
Borrowings through the NTBs auctions conducted by the CBN stood at N1.181 trillion, while FGN Bonds FGN Savings accounted for N939.246 billion and N14 billion respectively.
In October and November this year the Federal Government borrowed N774.953 billion through NTB; FGN Savings Bonds of N635.752 billion and FGN Savings Bond amounting to N7.152 billion.
According to the recent data released by the DMO, the Federal Government’s domestic debt stock for the first half of the year, HI’24, stood at N66.957 trillion, representing 38.6% growth from N48.314 trillion in HI’23.
CBN borrowings through NTBs rose to N11.8 trillion in HI’24 from N4.7 trillion in H1’23 and accounted for 17.64 % of the total FG’s borrowing.
FG’s borrowing through the monthly FGN Bond auctions, which constituted 78.13 % of total FG borrowing during the period, rose to N52.315 trillion in the HI’24 from N41.722 trillion in HI’23.
FG’s borrowing through Sukuk Bonds, which accounted for 1.6% of total FG domestic borrowing during the period, rose to N1.092 trillion in HI’24 from N742 billion in H1’23.
FG’s domestic borrowing through FGN Savings Bonds accounted for 0.08% of total FG’s borrowing during the period, also spiked, rising to N55.196 billion in H1’24 from N30.704 trillion in H1’23.
The federal government had in the 2024 budget estimated N27.50 trillion total expenditure and N18.32 trillion revenue, leaving the FG with a N9.05 trillion fiscal deficit hence, fiscal deficit is expected to be financed by a combination of domestic borrowings (N6.04 trillion), foreign borrowings (N1.77 trillion), multilateral/bilateral loan drawdowns (N941.19 billion), and privatisation proceeds amounting to N298.49 billion.
