FG Exceeds 2025 Borrowing Target By ₦6.06tn, Risks Deepening Debt Trap

The Federal Government has borrowed a staggering ₦17.36 trillion from both domestic and external sources in the first ten months of 2025 — 55.6% (₦6.06 trillion) higher than the prorated ten-month borrowing target of ₦10.9 trillion set under the 2025 Appropriation Act.

With the total approved borrowing for the entire fiscal year pegged at ₦13.08 trillion, analysts warn that the government could exceed its budgeted borrowing by nearly 80% by year-end if current trends persist.

According to data from the Debt Management Office (DMO) and the Central Bank of Nigeria (CBN), the bulk of the borrowing ₦15.8 trillion came from domestic investors as of October 2025, while ₦1.56 trillion was raised from external sources in the first half of the year.

The government has also initiated moves to secure an additional $2.35 billion (₦3.38 trillion) via a Eurobond issuance, potentially pushing the total borrowing to ₦20.74 trillion.

Under the 2025 budget, the FG projected ₦54.99 trillion in total spending against an expected revenue of ₦41.91 trillion, leaving a planned ₦13.08 trillion deficit to be financed primarily through debt.

Fiscal Concerns Mount

Economists have sounded alarms over the government’s ballooning borrowing spree, warning of a self-reinforcing debt trap that could erode investor confidence and crowd out private-sector borrowing.

They argue that with weak revenue performance and persistent deficit financing, the nation’s fiscal consolidation efforts, backed by the International Monetary Fund (IMF), risk being derailed.

Experts Identify Key Triggers

1. Fiscal Indiscipline and Governance Costs
Andrew Uviase, Managing Partner at Ecovis OUC, described the surge in borrowing as “a reflection of fiscal indiscipline and poor expenditure control.”
He noted that weak non-oil revenue, coupled with insecurity’s drag on economic activity, continues to constrain inflows.

“Government must show honesty and transparency. Excessive borrowing will persist if spending remains unchecked,” he warned.

2. Unrealistic Revenue Assumptions
David Adonri, Vice Executive Chairman of Highcap Securities, faulted the budget’s “aggressive and unrealistic revenue targets,” especially its oil-sector assumptions.
He said the government’s estimates of 2.06 million barrels per day at $75 per barrel have not materialised, with production stuck around 1.6–1.7 mbpd and prices sliding to about $65.

“Nigeria’s addiction to debt has undermined fiscal discipline,” he cautioned.

3. Escalating Debt-Service Costs
Public affairs analyst Clifford Egbomeade linked the borrowing excess to surging debt-service obligations and weak tax receipts.
He cited low oil output (averaging 1.35–1.4 mbpd) and inflation’s impact on consumption, which eroded VAT and company tax collections.

“With Eurobond options limited by high global interest rates, the government turned inward, offering over 20% yields on local bond auctions,” he said.

Breakdown Of Borrowing Instruments

• ₦11.43tn raised through Treasury Bills — up 4.6% year-on-year (YoY).
• ₦4.04tn via FGN Bonds — down 22% YoY.
• ₦40.19bn through FGN Savings Bonds — up 5.6% YoY.
• ₦300bn raised via Sukuk Bonds — compared to zero issuance in 2024.

Economic Outlook

Analysts warn that without decisive fiscal restraint and a realistic revenue framework, Nigeria’s debt burden could become unsustainable, stifling growth and raising inflationary pressures.

The government has defended its borrowing strategy as essential to fund infrastructure and social spending, but economists insist that without stronger revenue mobilisation, the country risks slipping deeper into a debt spiral.