FG borrowing hits N8.1tn in first quarter as debt pressure mounts

Nigeria’s debt concerns deepened in the first quarter of 2026 after the federal government borrowed N8.1 trillion domestically, exceeding the quarterly benchmark set under the 2026 budget.

The latest figure represents a 7.4 per cent increase from the N7.5 trillion recorded in the same period of 2025, reflecting continued pressure on public finances amid weak revenue growth and rising expenditure demands.

Data from the Central Bank of Nigeria and the Debt Management Office showed borrowing was driven largely by increased issuance of FGN Bonds and Savings Bonds, despite a decline in Treasury Bills.

Analysts said the trend highlights persistent fiscal imbalances and growing dependence on debt to fund government operations.

Ifeanyi Ubah, chief investment officer of VNL Capital Asset Management Company said: “Government revenue continues to fall short of expectations. When actual receipts miss targets by a wide margin, borrowing becomes the default tool to keep the lights on and meet recurrent obligations.”

The World Bank also warned that heavy debt servicing is weakening Nigeria’s ability to invest in infrastructure and human capital.

In its latest Nigeria Development Update, the lender said capital spending fell from 1.3 per cent of GDP in 2024 to 1.0 per cent in 2025.

According to the report, only 24 per cent of the prorated 2025 capital budget of ministries, departments and agencies was implemented, limiting the economic impact of public expenditure.

David Adonri, chief executive officer of HighCap Securities warned that excessive domestic borrowing could crowd out private sector investment and fuel inflation.

He said: “The huge deficit in the 2026 budget necessitates borrowing. For the government to overshoot its borrowing limit in Q1 may indicate revenue shortfalls or a deliberate decision to overtrade.”

While some experts argued that borrowing can support growth if channelled into productive infrastructure, many insisted that stricter fiscal discipline, better tax collection and reduced waste are now critical.

With external loan approvals already added to domestic borrowing, analysts expect Nigeria’s total borrowing for 2026 may surpass official projections unless revenues improve significantly.