Nigeria’s rising debt profile came under fresh scrutiny, as the Federal Government ramped-up domestic borrowing to ₦8.1 trillion in the first quarter of 2026, marking a 7.4% increase from ₦7.5 trillion recorded in the same period last year.
Data from the Central Bank of Nigeria (CBNM and the Debt Management Office (DMO) show that the increase was largely driven by higher issuances of FGN Bonds and Savings Bonds, even as borrowing through Treasury Bills declined.
Analysts say the trend reflects persistent revenue shortfalls and weak fiscal discipline, warning that the government may be relying too heavily on borrowing to meet its obligations. They are urging authorities to boost revenue collection, reduce wasteful spending, and strengthen anti-corruption measures.
Under the 2026 budget, the government plans to borrow ₦29.2 trillion to bridge the gap between projected revenue of ₦68.32 trillion and expenditure of ₦36.87 trillion. However, with ₦8.1 trillion already borrowed domestically in Q1 and an additional $6 billion external loan recently approved, there are growing concerns that the borrowing target may be exceeded again this year.
Nigeria’s total debt stock, which stood at ₦153.29 trillion as of Q3 2025, is expected to rise further—raising fears about long-term sustainability and increasing debt servicing costs.
The World Bank has warned that the country’s mounting debt-service burden is significantly limiting its ability to invest in critical infrastructure.
The report also highlighted weak project execution, noting that only 24% of the 2025 capital budget allocated to ministries, departments, and agencies (MDAs) was actually implemented—reducing the impact of public spending on economic growth.
Experts attribute the borrowing surge to multiple factors, including underperformance in oil revenue, expansion of the 2026 budget, and structural inefficiencies in revenue generation. Some analysts also point out that a large share of new borrowing is now being used to service existing debt, raising concerns about a potential debt trap.
While rising oil prices and ongoing tax reforms offer some optimism, experts stress that stronger fiscal discipline and efficient allocation of resources are essential to stabilise Nigeria’s finances.
