The Federal Government (FG) has borrowed a total of N17.36 trillion from domestic and foreign sources between January and October 2025, surpassing the ten-month borrowing limit set in the 2025 Appropriation Act by N6.06 trillion, or 55.6 percent. According to data from the Debt Management Office (DMO) and the Central Bank of Nigeria (CBN), the government secured N15.8 trillion from domestic investors and N1.56 trillion from external sources within the period under review. This borrowing level already exceeds the prorated target of N10.9 trillion set for the first ten months of the year. The 2025 national budget had projected a total borrowing of N13.08 trillion for the entire fiscal year to finance a N13.08 trillion deficit, based on projected revenue of N41.91 trillion and total expenditure of N54.99 trillion. Meanwhile, the Federal Government recently initiated moves to raise an additional $2.35 billion (N3.38 trillion) through a Eurobond issuance, which could push total borrowings to around N20.74 trillion. Analysts estimate that if the current borrowing trend continues, total government debt for the year could approach N23 trillion—about N10 trillion higher than budget projections. Fiscal Indiscipline, Rising Debt Concerns Financial experts have expressed concern that the government’s persistent overshooting of its borrowing plan amid weak revenue growth could trap the country in a cycle of unsustainable debt. Andrew Uviase, Managing Partner at Ecovis OUC, described the trend as “a clear reflection of fiscal indiscipline and poor expenditure control,” urging government to cut waste and improve governance efficiency. Similarly, David Adonri, Vice Executive Chairman of Highcap Securities, said the excessive borrowing stems from “aggressive and unrealistic revenue assumptions,” especially oil-related projections. “The 2025 budget was based on an oil output of 2.06 million barrels per day at $75 per barrel — both overly optimistic,” he said. “Actual output has averaged around 1.6 to 1.7 million barrels, while prices have fallen below $70.” Adonri warned that government’s “addiction to debt” risks eroding fiscal credibility, despite claims of increased revenue from the removal of fuel and FX subsidies. Tunde Abidoye, Head of Research at FBNQuest Merchant Bank, echoed the sentiment, warning that the government’s borrowing spree “is crowding out private sector access to credit” and driving up interest rates. Breakdown of Borrowing The FG borrowed N11.43 trillion through Treasury Bills as of October, a 4.6 percent year-on-year increase from N10.93 trillion in 2024. Borrowing through FGN Bonds dropped by 22 percent to N4.04 trillion, while FGN Savings Bonds rose by 5.6 percent to N40.19 billion. The government also reintroduced Sukuk Bonds, raising N300 billion this year. Threats to Private Sector and Growth Analysts warn that the surge in government borrowing is pushing up yields on government securities — now above 20 percent — discouraging lending to private businesses. Adonri noted that “excessive borrowing by the government escalates the cost of funds and crowds out the production sector,” while Uviase warned that “banks naturally prefer lending to the government over businesses,” stifling industrial growth. IMF, Fiscal Framework at Odds The borrowing overshoot also contradicts Nigeria’s Medium-Term Fiscal Framework (2025–2027), which targets a budget deficit below 3% of GDP. The IMF and World Bank have repeatedly warned about Nigeria’s rising debt-service-to-revenue ratio, estimated at 83 percent in 2024. Analyst Clifford Egbomeade cautioned that “the government’s excessive domestic borrowing undermines the IMF-backed fiscal consolidation agenda,” adding that even with GDP growth of 4.23 percent in Q2 2025 and inflation moderating to 18 percent, the fiscal gap continues to widen. Calls for Reform Experts urge the Federal Government to strengthen tax reforms, cut recurrent expenditure, and boost non-oil revenue to reduce debt reliance. Abidoye advised government to “reduce the debt ceiling from 60% of GDP and benchmark borrowing against revenue,” while Egbomeade urged “rebalancing borrowing toward longer-term, concessional external loans” to ease refinancing risks. Uviase summed up the concern succinctly: “Without strict expenditure control and honest fiscal management, Nigeria risks borrowing to service debt rather than to finance growth.”
