Some ministers in President Bola Ahmed Tinubu’s cabinet have defended the administration’s borrowing strategy, emphasizing its necessity despite increased revenue collections by government agencies.
During Monday’s ongoing sessions with the Federal Government agencies and the National Assembly’s Joint Committees on Finance, Budget, and National Planning for the 2025–2027 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), Senator Adamu Aliero, representing Kebbi Central, questioned the rationale behind continued borrowing.
He asked, “What is the Federal Government and its agencies doing with the excess revenues generated by various agencies in view of its unending request for foreign loan approvals?”
Last week, the Senate approved Tinubu’s request for a $2.209 billion loan, equivalent to ₦1.767 trillion.
Responding, the Minister of Budget and Economic Planning, Senator Atiku Bagudu, clarified that the borrowing plans embedded in the ₦35.5 trillion 2024 budget were essential to fund the ₦9.7 trillion deficit.
“Despite revenue targets being surpassed by some revenue-generating agencies, the government still needs to borrow for proper funding of the budget, particularly in areas of deficit and productivity for the poorest and most vulnerable,” Bagudu explained. He added, “We have a long-term development perspective plan, Agenda 2050, aiming at a GDP per capita of $33,000.”
The Minister of Finance, Wale Edun, echoed similar sentiments, stating that borrowing remains crucial for adequately funding the budget, even with improved revenue collections.
Chairman of the Federal Inland Revenue Service (FIRS), Zacch Adedeji, emphasized that the loans requested by the Executive were already part of the appropriation act passed by the National Assembly.
“Borrowing is part of what has been approved by the National Assembly for the federal government, meaning that the Executive borrows based on legislative approval,” Adedeji stated.
He further noted that while revenue targets had been surpassed, this does not negate the need to activate the borrowing components of approved budgets. Providing figures, he highlighted that Company Income Tax collections had exceeded the ₦4 trillion target, reaching ₦5.7 trillion, and Education Tax collections had risen from a ₦70 billion target to ₦1.5 trillion.
“Overall, out of the ₦19.4 trillion targeted for the 2024 fiscal year, ₦18.5 trillion had been realized as of September, and the target will likely be exceeded by year-end,” Adedeji said.
Similarly, Comptroller-General of the Nigeria Customs Service (NCS), Bashir Adeniyi, disclosed that as of September, the agency had generated ₦5.352 trillion, surpassing its ₦5.09 trillion target for the year. For 2025, the Customs Service projects ₦6.3 trillion in revenue, with an additional 10% increase projected for both 2026 and 2027.
The Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, reported that the company had already exceeded its ₦12.3 trillion revenue target for 2024 by generating ₦13.1 trillion. For the 2025 fiscal year, Kyari announced that the NNPCL plans to remit ₦23.7 trillion into the federation account.
However, the Senate raised concerns about an allegedly unfavorable Public-Private Partnership (PPP) arrangement between the Nigeria Immigration Service and a private firm for passport production. According to Senator Sani Musa, representing Niger East and Chairing the Senate Committee on Finance, the agreement allocates 70% of proceeds to the consultancy firm and only 30% to the government.
“The so-called PPP arrangement must be reviewed or cancelled because Nigeria and Nigerians are seriously being short-changed,” Musa asserted. He directed the Immigration Service to submit all relevant documents on the arrangement to the committee before the end of the week.
