Nigeria’s Borrowing Plan Jumps ₦11.3 Trillion as Deficit Widens to ₦31.5 Trillion

The Federal Government has raised its 2026 borrowing plan by ₦11.31 trillion — from ₦17.89 trillion to ₦29.20 trillion — after the National Assembly approved a bigger budget that pushed the fiscal deficit to ₦31.46 trillion.

According to official documents obtained by Punch, the increase follows an expansion of the proposed 2026 budget, which now stands at ₦68.32 trillion in total spending against projected revenues of just ₦36.87 trillion. The earlier borrowing figure was based on a deficit estimate of ₦20.12 trillion from the December 2025 budget call circular. That deficit has since ballooned by over ₦11 trillion.

Where the Money Goes

Debt service alone accounts for ₦15.81 trillion — nearly a quarter of total spending. Domestic debt servicing costs ₦10.16 trillion. Foreign obligations take ₦5.36 trillion. Recurrent non-debt spending claims another ₦15.43 trillion, and capital expenditure is estimated at ₦32.29 trillion.

Revenue projections tell a different story. The government expects ₦25.92 trillion from federation revenues, ₦4.31 trillion from independent sources, and ₦5.85 trillion from government-owned enterprises. Add ₦1.37 trillion in aid and grants plus ₦300 billion from special funds, and it still falls well short of what the country plans to spend.

The gap is being closed almost entirely through borrowing. Asset sales and privatisation are projected to contribute just ₦189.16 billion. Multilateral and bilateral project-tied loans account for ₦2.05 trillion. Both are a fraction of the ₦29.2 trillion the government intends to borrow.

Critics Push Back

The Senate already approved Tinubu’s request for $6 billion in fresh external loans, a move former PDP presidential candidate Atiku Abubakar called “not just troubling but alarming.” Lawmakers also approved an increase in external borrowing by ₦6.163 trillion, insisting the borrowing remains “within manageable limits.”

Analysts are not convinced. Debt servicing costs already consume more than the entire capital budget. Borrowing accounts for over 90 percent of deficit financing. Nigeria’s debt trajectory is heading toward a point where servicing costs crowd out everything else, several economists have warned.

The government points to increased revenue as an offset — a $10-per-barrel oil benchmark increase expected to generate ₦2.592 trillion, plus ₦874 billion in additional telecom sector taxes from MTN and Airtel. Whether that actually materialises is another matter entirely.

Sources: Punch, Nairametrics, Channels TV, Legit.ng