The Federal Government (FG) has borrowed a massive ₦17.36 trillion from domestic and foreign sources in the first ten months of 2025.
This figure represents an excess of ₦6.06 trillion (55.6%) over the prorated ten-month borrowing target of ₦10.9 trillion stipulated in the 2025 Appropriation Act.
With the total approved borrowing for the entire fiscal year set at ₦13.08 trillion, financial forecasts suggest the excess borrowing could reach nearly 80% of the budget target by year-end.
The total borrowing so far includes ₦15.8 trillion sourced from domestic investors as of October 2025, with an additional ₦1.56 trillion secured from external sources as of the first half of the year.
The FG recently intensified this borrowing spree by initiating moves last week to secure an additional $2.35 billion (₦3.384 trillion) via Eurobond issuance, which would push the total borrowing to ₦20.74 trillion.
In the 2025 Appropriation Act, the FG projected an expenditure of ₦54.99 trillion against a revenue forecast of ₦41.91 trillion, leaving a planned deficit of ₦13.08 trillion to be financed through debt.
Financial analysts are sounding the alarm, warning that this persistent overshoot, coupled with weak revenue performance, intensifies the risk of a self-reinforcing debt trap. This situation threatens to erode foreign investor confidence and severely restricts the private sector’s access to credit, with inevitable negative consequences for business expansion, job creation, and the general cost of living. Experts also noted that this excessive borrowing undermines IMF-backed fiscal consolidation efforts.
Experts have attributed the surge in debt to a combination of fiscal indiscipline and overly optimistic revenue projections:
1. Fiscal Indiscipline and Cost of Governance: Andrew Uviase, Managing Partner at Ecovis OUC, described the escalating borrowing as “a clear reflection of fiscal indiscipline and poor expenditure control.” He argued that the government is not sufficiently controlling its spending pattern, and without honesty and transparency, excessive borrowing will continue because money is “never enough.” He also cited disappointing non-oil revenue performance and the negative impact of insecurity on economic activities that could otherwise boost revenue.
2. Aggressive Revenue Assumptions: David Adonri, Vice Executive Chairman of Highcap Securities, blamed the borrowing surge on “aggressive and unrealistic revenue assumptions,” particularly oil-related forecasts. He noted that the budget was anchored on an optimistic oil production target of 2.06 million barrels per day (mbpd) and a price of $75 per barrel. Actual production has hovered around 1.6 to 1.7 mbpd, while prices have fallen to about $65. Adonri warned that the government’s “addiction to debt” continues to undermine fiscal consolidation.
3. Rising Debt-Service Costs: Public analyst Clifford Egbomeade attributed the overshoot to a combination of weak revenue and rising debt-service costs. He explained that low oil production averaging 1.35–1.4 mbpd and inflation eroding consumption led to shortfalls in VAT and company tax receipts. This, he noted, forced the Treasury to turn to the domestic market, where “double-digit yields of over 20% at bond auctions” and the deferral of Eurobond issuance due to high global interest rates expanded the government’s cash needs.
Data from the Debt Management Office (DMO) and the Central Bank of Nigeria (CBN) confirm that the FG has borrowed ₦15.8 trillion from domestic investors through FGN Bond auctions, FGN Savings Bonds, Sukuk Bonds, and Treasury Bills.
Specifically, the FG borrowed ₦11.43 trillion through Treasury Bills (Primary Market Auctions), a 4.6% Year-on-Year (YoY) increase from the previous year. While borrowing through FGN Bonds saw a reduction of 22% YoY to ₦4.042 trillion, borrowing through the FGN Savings Bond auction rose by 5.6% YoY to ₦40.19 billion.
The FG also raised its borrowing through Sukuk Bond issuance to ₦300 billion in the first ten months of the year, up from zero issuance in the corresponding period of 2024.
