VANGUARD
As President Bola Tinubu prepares to present to the National Assembly tomorrow, the 2025 national budget largely saddled with funding by borrowings, the Federal Government (FG) is set to overshoot its domestic borrowing target for 2024 by N4 trillion, about 67 per cent above the budgeted amount.
These are coming despite the widespread concerns over the continued rise in the nation’s debt stock.
Details of the domestic borrowing activities of the government in the 11 months to November 2024 is already showing borrowing in excess of N2.93 trillion or 49 per cent above the target as of November.
Financial Vanguard findings showed that 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.
Meanwhile, these are coming 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.”
Details of 11M’24 FG Securities
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.
Further analysis showed that 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.
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