Nigeria’s fiscal state has reached alarming levels as a recent report by BudgIT, a public accountability firm, reveals that the Federal Government (FG) spent more than three times its revenue in 2023.
According to BudgIT’s analysis of the 2023 fiscal accounts from the Office of the Accountant-General of the Federation, the government recorded a deficit of N13.50 trillion, sparking widespread concerns about the country’s rising debt and economic instability.
The report shows that the Federal Government generated N5.99 trillion in revenue but spent an overwhelming N19.50 trillion.
This expenditure exceeded the government’s revenue by 225%, reinforcing the need for urgent fiscal reforms to avoid further exacerbating the country’s economic woes.
BudgIT’s findings indicate that revenue sources included N3.80 trillion from the Federation Account Allocation Committee (FAAC), N1.98 trillion from independent government revenue, and N202.54 billion from other sources.
However, this income was dwarfed by the government’s exorbitant spending, which has raised questions about the sustainability of Nigeria’s financial management.
Escalating Debt Crisis
Victor Agi, a fiscal accountability expert at the Centre for Fiscal Transparency and Integrity Watch, expressed grave concerns over Nigeria’s mounting debt crisis.
Agi warned that the country is spiraling into deeper financial trouble, with limited funds for critical infrastructure projects and capital expenditure.
“The economy is bleeding, and we are struggling to fund capital expenditure. The implications are dire,” Agi said, stressing that Nigeria’s economic managers have consistently failed to prioritize the nation’s economic health.
According to Agi, the country’s economy has seen little to no growth since 2014, a trend that could worsen if the current fiscal trajectory is maintained.
“The problem isn’t just that the government is borrowing,” Agi said. “The real issue is what the government is borrowing for. We are borrowing to service debt and fund frivolous expenditures, which is unsustainable.”
Agi said only 4.4% of the FG’s N19.50 trillion expenditure in 2023 was allocated to capital projects, an amount he deemed “unacceptable” given Nigeria’s infrastructure needs.
This continued diversion of funds away from productive investments could have serious repercussions for the nation’s long-term economic development.
Public Outcry Over Fiscal Mismanagement
Public policy expert Femi Oladele also criticized the government’s approach to fiscal management. He pointed out that while spending more than one earns is not inherently bad, the nature of the expenditures is key.
“If I earn N200,000 monthly but spend N1 million in three months, that’s not necessarily bad. But if we examine what I spent the money on, that’s where the issue lies,” Oladele said.
Oladele believes the government may be counting on some unknown “windfalls” to maintain its spending levels.
He warned that the government’s tendency to prioritize non-essential expenditures amid a struggling economy is leading the country deeper into financial uncertainty.
“There are expenditures that can wait until we exit this economic doldrum,” Oladele said. “But it appears the government is not so worried about these issues.”
Oladele also underscored the need for local investment to stimulate economic growth and development.
“Most of the spending isn’t even local, so it has little impact on our economy directly. We need to invest in the local economy to spur growth and development.”
Calls for Fiscal Responsibility
Experts are now calling for greater fiscal responsibility from the Federal Government. They argue that Nigeria’s economic situation will not improve unless there is a concerted effort to reduce non-essential spending and prioritize capital investments that can drive growth and job creation.
As Nigeria’s debt continues to balloon, the pressure is mounting on the government to implement sustainable fiscal policies and curb excessive borrowing.
With the country’s financial stability at risk, many warn that without immediate action, Nigeria could face an even deeper economic crisis in the near future.
The BudgIT report has raised a critical alarm, signaling the urgent need for reforms to restore fiscal balance and chart a path toward economic recovery.
Whether the government heeds these warnings and makes the necessary adjustments remains to be seen, but one thing is clear: Nigeria’s current fiscal path is unsustainable.
