Nigeria's Borrowing Spree Reaches Alarming Levels
The Federal Government of Nigeria has significantly exceeded its borrowing targets for 2025, raising serious concerns among financial experts and economic analysts. Recent data reveals that the government borrowed a massive ₦17.36 trillion from both domestic and foreign sources during the first ten months of 2025.
Breaking Down the Numbers
This substantial borrowing figure represents a 55.6% excess over the prorated ten-month borrowing target of ₦10.9 trillion that was stipulated in the 2025 Appropriation Act. The overshoot amounts to ₦6.06 trillion beyond what was originally planned for this period.
With the total approved borrowing for the entire fiscal year set at ₦13.08 trillion, financial forecasts indicate that the excess borrowing could reach nearly 80% of the budget target by the end of the year if the current trend continues.
Sources of Borrowing
The breakdown of the ₦17.36 trillion total borrowing shows that ₦15.8 trillion was sourced from domestic investors as of October 2025, while an additional ₦1.56 trillion came from external sources during the first half of the year.
The government recently intensified this borrowing spree by initiating moves to secure an additional $2.35 billion (approximately ₦3.384 trillion) through Eurobond issuance last week. If successful, this would push the total borrowing to ₦20.74 trillion.
Budget Context and Deficit Financing
In the 2025 Appropriation Act, the Federal Government projected total expenditure of ₦54.99 trillion against a revenue forecast of ₦41.91 trillion. This created a planned deficit of ₦13.08 trillion that was intended to be financed through debt.
The current borrowing levels significantly exceed this planned deficit, indicating deeper fiscal challenges than initially anticipated.
Expert Warnings and Analysis
Financial analysts are sounding the alarm about the consequences of this persistent borrowing overshoot. They warn that this trend, combined with weak revenue performance, intensifies the risk of a self-reinforcing debt trap.
The situation threatens to erode foreign investor confidence and severely restrict the private sector's access to credit. This could have inevitable negative consequences for business expansion, job creation, and the general cost of living for Nigerians.
Experts also noted that this excessive borrowing undermines IMF-backed fiscal consolidation efforts that aimed to bring more discipline to government finances.
Causes of the Borrowing Surge
Several experts have identified key factors driving the surge in government borrowing:
Fiscal Indiscipline and Governance Costs: 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 patterns and emphasized that without honesty and transparency, excessive borrowing will continue because money is "never enough."
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, while actual production has hovered around 1.6 to 1.7 mbpd and prices have fallen to about $65.
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.
Detailed Breakdown of Domestic Borrowing
Data from the Debt Management Office (DMO) and the Central Bank of Nigeria (CBN) confirm the detailed composition of domestic borrowing:
The Federal Government borrowed ₦11.43 trillion through Treasury Bills (Primary Market Auctions), representing a 4.6% Year-on-Year (YoY) increase from the previous year.
Borrowing through FGN Bonds saw a reduction of 22% YoY to ₦4.042 trillion, while borrowing through the FGN Savings Bond auction rose by 5.6% YoY to ₦40.19 billion.
The government 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.
Economic Implications
The combination of these factors creates a challenging economic environment. The government's continued reliance on domestic borrowing at "double-digit yields of over 20% at bond auctions" puts additional pressure on public finances through high debt servicing costs.
The deferral of Eurobond issuance due to high global interest rates has further expanded the government's cash needs, forcing increased dependence on the domestic market.
As Nigeria navigates these fiscal challenges, experts emphasize the need for more realistic revenue projections, better expenditure control, and a comprehensive strategy to address the underlying causes of the revenue shortfalls that are driving the borrowing surge.
