FG To Borrow N17.89tn In 2026 As Revenue Outlook Weakens

Nigeria is gearing up for a sharp rise in borrowing next year, with the Federal Government planning to take on N17.89tn in new loans for 2026, a major jump from the N10.42tn projected for 2025. The figures, drawn from the 2026 budget framework obtained from the Budget Office, paint a picture of widening fiscal pressure and shrinking revenue space.

According to the Abridged Budget Call Circular, the fiscal deficit is expected to swell to N20.12tn in 2026 up by 43 per cent from the previous year. Yet, thanks to a larger GDP base, the deficit-to-GDP ratio is projected to decline slightly to 3.61 per cent. That downward trend, government says, should continue into 2027 and 2028.

The real strain is on the income side. Available revenue for the federal budget, excluding GOE earnings, is forecast to fall from N38.02tn in 2025 to N29.35tn in 2026, an N8.67tn drop. Some recovery is expected in later years, but not enough to close the gap.

To bridge the deficit, Abuja is leaning heavily, almost overwhelmingly on local borrowing. Out of the planned N17.89tn for 2026, N14.31tn (80%) will be raised domestically. This pattern continues through 2027 and 2028, with the same 80:20 split between domestic and external debt. Across those three years, the government intends to borrow N54.91tn, with domestic creditors carrying the bulk of the load.

Debt servicing is also climbing. Payments are projected to rise from N13.94tn in 2025 to N15.52tn in 2026, pushing the debt service-to-revenue ratio from 34 per cent to a worrying 45 per cent. By 2027, it is expected to hit 53 per cent meaning more than half of all government revenue could go into paying old debts.

Expenditure, on the other hand, barely shifts. Total federal spending is expected to slide marginally from N54.99tn to N54.46tn, but the structure leans even more heavily toward recurrent items and debt obligations. Personnel costs, pensions, and service-wide votes all rise, while capital spending is set to fall from N26.19tn to N22.37tn, with most ministries rolling over unspent 2025 allocations.

Privatisation receipts and project-tied loans shrink further, offering little relief.

Economists are waving red flags.
Dr. Muda Yusuf of the CPPE warned that aggressive borrowing threatens Nigeria’s fragile economic stability, cautioning that rising deficits could trigger inflationary and exchange-rate shocks. He urged the government to use recent improvements in revenue to reduce deficits, not expand them.

Professor Adeola Adenikinju of the Nigerian Economic Society raised concerns about domestic borrowing crowding out private investment. As government demand for credit grows, interest rates could rise, leaving businesses struggling for funding. sophia rain nude Athena

There were sharper warnings at a national debt dialogue in Abuja. Speakers stressed that Nigeria is piling up obligations future generations will inherit without seeing development gains. Climate disasters, weak transparency, delayed capital releases, and spending that doesn’t transform the economy were all cited as risks that worsen the burden.

BudgIT’s Acting Country Director, Joseph Amenaghawon, described the situation as “debt without development,” arguing that the country faces not just a debt challenge, but a structural crisis of poor priorities and governance.

Experts across the board called for transparency, accountability, and a shift toward productive investment that builds resilience and creates long-term value.