The Federal Government (FG) has borrowed N17.36 trillion from domestic and external sources in the first ten months of 2025, exceeding the N10.9 trillion borrowing limit set under the 2025 Appropriation Act by N6.06 trillion, or 55.6 percent.
The approved total borrowing for the year stands at N13.08 trillion.
Breakdown of the borrowing shows N15.8 trillion sourced domestically as of October 2025 and N1.56 trillion from external sources in the first half of the year. Last week, the FG initiated moves to raise an additional $2.35 billion (N3.384 trillion) via Eurobond issuance, which would increase total borrowing to N20.74 trillion. Analysts estimate that if current trends continue, total borrowing for 2025 could reach nearly N23 trillion, about N10 trillion above the budgeted amount, or 80 percent in excess of the approved target.
Financial experts have warned that this persistent overshoot amid weak revenue performance raises the risk of a self-reinforcing debt trap, erodes foreign investor confidence, and constrains private sector access to credit, with negative effects on business expansion, job creation, and the cost of living.
The 2025 Appropriation Act projected total expenditure of N54.99 trillion against N41.91 trillion in revenue, leaving a deficit of N13.08 trillion to be financed through domestic and external borrowing. The borrowing target for the first ten months was therefore N10.9 trillion, equivalent to N1.09 trillion monthly. Data from the Debt Management Office (DMO) and Central Bank of Nigeria (CBN) indicate that N15.8 trillion was borrowed domestically from January to October through FGN Bond auctions, FGN Savings Bonds, Sukuk Bonds, and Treasury Bills.
Analysts say the overshoot reflects fiscal indiscipline and unrealistic revenue assumptions, particularly regarding oil. The 2025 budget projected oil production of 2.06 million barrels per day at $75 per barrel, while actual production averaged 1.6–1.7 million barrels at about $65 per barrel. Andrew Uviase, Managing Partner at Ecovis OUC, described the borrowing surge as “a clear reflection of fiscal indiscipline and poor expenditure control,” citing weak non-oil revenue and rising insecurity as contributing factors. David Adonri of Highcap Securities called the government’s “addiction to debt” a driver of fiscal instability, while Tunde Abidoye of FBNQuest highlighted that overly optimistic oil benchmarks inevitably lead to revenue shortfalls and higher borrowing.
The borrowing mix shows N11.43 trillion raised through Treasury Bills, up 4.6 percent year-on-year; FGN Bonds reduced by 22 percent to N4.042 trillion; FGN Savings Bonds increased by 5.6 percent to N40.19 billion; and Sukuk Bonds rose to N300 billion from zero issuance in the previous year.
Experts warn that excessive domestic borrowing crowds out private sector credit, raises borrowing costs, and slows investment. Adonri noted that high government demand for credit distorts market pricing, pushing banks to favour risk-free government instruments over private lending, while Uviase emphasized that insatiable government borrowing raises interest rates and limits productive sector access to finance. Clifford Egbomeade added that rising yields above 20 percent and high debt-service costs divert liquidity from private investment, weakening medium-term growth prospects.
The borrowing pattern also conflicts with Nigeria’s fiscal consolidation goals under the Medium-Term Fiscal Framework (2025–2027), which aims to reduce the deficit to below 3 percent of GDP, and contradicts IMF and World Bank warnings regarding the rising debt-service-to-revenue ratio, estimated at 83 percent in 2024.
To curb excessive borrowing, experts urge the government to strengthen fiscal discipline, cut wasteful expenditure, broaden non-oil revenue collection, adopt digital tax initiatives, and prioritise longer-tenor, concessional external loans to ease refinancing pressures. They emphasise that sustained revenue and expenditure reforms are essential to shift Nigeria from a debt-driven recovery toward sustainable, investment-led growth.
