Debt Pressure Mounts As FG Borrows ₦8.1trn In 2026 Already

The Federal Government pushed domestic borrowing to ₦8.1 trillion in the first quarter of 2026, a 7.4 per cent jump from ₦7.5 trillion in the same period last year.

NaijaChoice News reports that the spike, driven largely by heavier issuance of FGN Bonds and Savings Bonds, has deepened worries over Nigeria’s mounting debt burden and its ripple effects on ordinary citizens.

Data from the Central Bank of Nigeria and the Debt Management Office show FGN Bonds jumped 63 per cent to ₦3.182 trillion, while Savings Bonds rose 24 per cent to ₦16 billion. Treasury Bills, however, dropped 12 per cent to ₦4.86 trillion.

Analysts say the trend points to stubborn revenue shortfalls and poor spending discipline. They warn that without urgent fixes, the government will keep borrowing to pay old debts, leaving little for roads, power and hospitals that Nigerians desperately need.

The World Bank, in its latest Nigeria Development Update released last week, painted a grim picture. Debt servicing now eats up so much money that capital spending has fallen to just 1.0 per cent of GDP, down from 1.3 per cent in 2024.

Only 24 per cent of the 2025 capital budget actually reached ministries, departments and agencies, the Bank noted. This squeeze, it said, is choking infrastructure projects and slowing economic growth across the country.

Under the 2026 Appropriation Act, the FG plans to borrow ₦29.2 trillion to plug the budget deficit. Already in Q1, domestic borrowing alone hit ₦8.1 trillion, and the National Assembly recently approved another $6 billion in external loans.

Debt stock stood at ₦153.29 trillion by end of Q3 2025, up 5.9 per cent from ₦144.67 trillion the previous year. Debt service-to-revenue ratio, already at 49.5 per cent in 2025, is expected to stay painfully high at around 41 per cent even by 2028.

Dr Ifeanyi Ubah, Chief Investment Officer at VNL Capital Asset Management, told NaijaChoice News the problem is simple: revenue keeps missing targets. “When actual receipts fall short, borrowing becomes the only way to meet recurrent bills,” he said.

He blamed the mid-year budget expansion for widening the deficit further. “A bigger budget on the same weak revenue base means more borrowing, and much of it now goes just to service old loans,” Ubah added.

Chief Executive of HighCap Securities, Mr David Adonri, linked the overshoot to the huge deficit baked into the 2026 budget. “Excessive domestic borrowing crowds out the real sector and fuels inflation,” he warned.

Head of Research at Quest Merchant Bank, Mr Tunde Abidoye, pointed at weak oil numbers. Average production of 1.6 million barrels per day fell below the budget benchmark of 1.8 million, forcing the government to borrow more to fill the gap.

Chief Economist at United Capital Plc, Mr Ayodele Akinwunmi, noted that borrowing patterns are not always uniform. “The government sometimes borrows heavily in the dry season for road projects, but the bigger issue remains revenue underperformance,” he said.

Analysts agree the outlook remains tough. Adonri fears a debt trap if fiscal indiscipline continues. Abidoye expects possible overshooting again in Q2 if revenues disappoint.

Ubah was blunt: “With a wide fiscal deficit and disappointing revenue, total borrowing for the year will likely exceed plans. The domestic bond market will stay under heavy pressure.”

On solutions, the experts speak with one voice: cut waste, fight corruption and raise more revenue. Adonri called for a disciplined balanced budget and rationalisation of recurrent spending.

Abidoye urged faster implementation of the new Tax Act to boost collections. Akinwunmi stressed smart project execution in infrastructure and productive sectors so that borrowed money actually generates growth and helps repay the loans.

For millions of Nigerians already struggling with high living costs, the message is clear: unless Abuja gets serious about revenue and spending discipline, the debt burden will keep squeezing funds for the very things that can lift living standards—better roads, steady power and quality healthcare.