The Federal Government (FG) has borrowed a staggering N17.36 trillion from both domestic and foreign sources in the first ten months of 2025 — overshooting its borrowing target by more than 55%.
According to data from the Debt Management Office (DMO) and the Central Bank of Nigeria (CBN), the borrowing figure far exceeds the N10.9 trillion earmarked for the same period under the 2025 Appropriation Act, which approved N13.08 trillion in total borrowings for the entire fiscal year.
Of the amount borrowed so far, N15.8 trillion came from domestic sources, while N1.56 trillion came from external creditors as of mid-2025.
Last week, the Federal Government announced plans to raise another $2.35 billion (N3.384 trillion) through a Eurobond issuance. If successful, total borrowing will climb to N20.74 trillion, and by year-end, projections suggest the figure could approach N23 trillion — nearly 80% higher than what the 2025 budget originally planned.
Analysts Raise Red Flags
Financial experts have raised serious concerns about Nigeria’s rising debt and widening fiscal deficit, warning that the government risks falling into a “self-reinforcing debt trap.”
They noted that the continuous overshooting of borrowing limits, amid weak revenue growth, could erode investor confidence, limit private sector access to credit, and worsen inflation and unemployment.
Andrew Uviase, Managing Partner at Ecovis OUC, described the situation as “a clear reflection of fiscal indiscipline and poor expenditure control.”
“The government still needs to do a lot more in reducing and controlling the cost of governance,” Uviase said. “The present situation suggests the government is not bothered about its spending pattern, and without honesty and transparency, we will continue to see excessive borrowing.”
He also highlighted weak non-oil revenue and insecurity as key reasons for poor revenue performance despite improved tax collection by the Federal Inland Revenue Service (FIRS).
Unrealistic Budget Assumptions
David Adonri, Vice Executive Chairman of Highcap Securities, blamed the borrowing surge on “aggressive and unrealistic revenue assumptions,” especially in the oil sector.
“The 2025 budget was anchored on 2.06 million barrels per day at $75 per barrel, which was overly optimistic,” Adonri said. “Actual production has hovered around 1.6 to 1.7 million barrels, while oil prices have dropped to about $65.”
He warned that the government’s “addiction to debt” and “brazen fiscal indiscipline” continue to undermine fiscal stability. “Despite increased revenue from fuel subsidy removal and foreign exchange reforms, government spending keeps rising. Borrowing has become a narcotic,” he added.
Similarly, Tunde Abidoye, Head of Research at FBNQuest Merchant Bank, said the unrealistic oil benchmarks in the budget “inevitably lead to revenue shortfalls and higher borrowing.”
Public affairs analyst Clifford Egbomeade attributed the borrowing excess to a combination of weak revenue and rising debt-servicing costs.
“Oil production has averaged around 1.35–1.4 million barrels per day, and inflation has eroded consumer spending, reducing VAT and company tax receipts,” Egbomeade explained. “This forced the Treasury to turn more aggressively to the domestic market.”
He added that “high domestic interest rates — over 20% at bond auctions — and delays in Eurobond issuance due to global rate hikes expanded the government’s financing gap.”
The Bigger Picture
Nigeria’s 2025 budget projected N54.99 trillion in expenditure and N41.91 trillion in revenue, leaving a deficit of N13.08 trillion — meant to be financed through borrowing.
With the government now exceeding its borrowing target by over half within ten months, financial analysts say the trend signals a deepening fiscal imbalance that could jeopardize long-term debt sustainability and crowd out private investment.
Unless the government urgently strengthens its fiscal discipline, diversifies its revenue sources, and curtails excessive spending, experts warn that Nigeria could face even tougher economic conditions in the years ahead.
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