Nigerian lawmakers have expressed concerns over the federal government’s decision to pursue foreign loans despite revenue-generating agencies exceeding their 2024 targets. The joint National Assembly Committees on Finance, led by Senator Sani Musa and Hon. Abiodun Faleke, scrutinized this during the review of the 2025-2027 Medium Term Expenditure and Fiscal Strategy Paper (MTEF-FSP) on Monday.
$2.2 Billion Loan Sparks Questions
Senator Adamu Aliero (PDP, Kebbi Central) questioned why the government seeks a $2.2 billion loan despite claiming to have gained over $20 billion from the removal of fuel subsidies.
Responding, Zacchaeus Adedeji, Chairman of the Federal Inland Revenue Service (FIRS), explained that the borrowing was pre-approved as part of the 2024 budget, which includes both internally generated revenue and a borrowing component.
Justifications for Borrowing
Senator Atiku Bagudu, Minister of Budget and Economic Planning, stated that the ₦35.5 trillion 2024 budget includes a ₦9.7 trillion deficit that necessitates borrowing. He emphasized that surplus revenues from agencies, while commendable, cannot fully offset funding gaps.
Finance Minister Wale Edun supported the position, citing borrowing as essential for funding deficits and economic interventions for the vulnerable. He highlighted reforms, including floating the naira and removing petroleum subsidies, as steps toward economic discipline.
“For the first time in four decades, Nigeria is witnessing market-determined prices for petroleum products and foreign exchange,” Edun remarked.
Revenue Agencies Surpass Targets
During presentations to the committee, several agencies reported exceeding 2024 targets:
- Nigerian Customs Service (NCS): Collected ₦5.35 trillion by September, surpassing the ₦5.09 trillion annual target.
- NNPCL: Generated ₦13.1 trillion, exceeding the ₦12.3 trillion projection. For 2025, the agency projects remittances of ₦23.7 trillion.
- FIRS: Achieved ₦18.5 trillion by September, nearly reaching its annual target of ₦19.4 trillion.
Immigration Service PPP Under Scrutiny
The Immigration Service faced criticism over a skewed Public-Private Partnership (PPP) agreement, granting consultants 70% of passport production proceeds, leaving only 30% for the government. Senator Sani Musa called for a review or cancellation of the arrangement.
2025 Economic Outlook
The Director General of the Budget Office, Taminu Yakubu, predicted significant economic improvements in 2025, including:
- Reduced inflation due to bumper harvests and decreased fuel imports from the operational Dangote Refinery.
- Increased revenue from refined product exports and reduced subsidy payouts.
- Stabilized interest rates as reforms enhance public revenue streams.
However, Yakubu cautioned that borrowing may persist until macroeconomic stability is fully achieved.
NNPCL Refineries and Forensic Audit
Despite announcing progress in refining operations, the NNPCL failed to provide a start date for its refineries. Lawmakers welcomed the federal government’s forensic audit into the company’s ₦8 trillion debt claims.
The debate over Nigeria’s borrowing highlights tensions between surplus revenue and budgetary deficits. While the government defends its borrowing strategy as essential for development, lawmakers continue to demand greater transparency and fiscal responsibility.
