Nigeria’s Federal Government has exceeded its 2025 borrowing target by 55.6 percent, raising deep concerns among economists and financial analysts about the country’s rising debt profile and the potential crowding out of private sector credit.
According to official data from the Debt Management Office (DMO) and the Central Bank of Nigeria (CBN), the government borrowed a total of ₦17.36 trillion within the first ten months of the year—₦15.8 trillion from domestic sources and ₦1.56 trillion from external financing.
This already surpasses the ₦10.9 trillion borrowing limit set in the 2025 Appropriation Act for the same period.
If the current trend continues, analysts project total borrowing could reach nearly ₦23 trillion by year-end, representing an 80 percent overshoot of the full-year target.
FG Exceeds 2025 Borrowing Target Amid Weak Revenue Performance
The 2025 budget projected total government expenditure of ₦54.99 trillion and revenue of ₦41.91 trillion, creating a deficit of ₦13.08 trillion to be financed through domestic and external loans.
However, the revenue shortfall and rising fiscal pressure have forced the government to borrow aggressively to meet spending obligations.
Data reveals that between January and October 2025, the Federal Government borrowed ₦11.43 trillion through Treasury Bills—an increase of 4.6 percent from the same period in 2024.
Borrowing through FGN Bonds declined to ₦4.04 trillion, while the FGN Savings Bond issuance rose slightly to ₦40.19 billion.
Additionally, the introduction of a ₦300 billion Sukuk Bond in 2025 added to the debt pile, alongside a planned $2.35 billion Eurobond issuance, which would further raise total borrowings to over ₦20 trillion.
Analysts Decry Fiscal Indiscipline and Overspending
Experts have described the situation as a reflection of fiscal indiscipline and weak expenditure control, urging the government to exercise caution.
According to Andrew Uviase, Managing Partner at Ecovis OUC, the surge in borrowing “reflects poor fiscal discipline and an uncontrolled spending pattern.”
“The government must demonstrate honesty and transparency in managing public finances. Without tackling waste and the high cost of governance, Nigeria will remain trapped in a debt spiral,” he said.
Similarly, David Adonri, Vice Executive Chairman of Highcap Securities, attributed the problem to “aggressive and unrealistic revenue assumptions.”
He noted that the 2025 budget was based on overly optimistic oil benchmarks of 2.06 million barrels per day at $75 per barrel, while actual production has averaged around 1.6 million barrels and prices have dropped below $70.
Adonri described the government’s borrowing pattern as “a dangerous addiction,” warning that Nigeria risks sliding into a self-reinforcing debt trap that undermines fiscal stability and investor confidence.
Borrowing Surge Threatens Private Sector Growth
Economic experts warn that the Federal Government’s rising appetite for debt is crowding out private sector access to credit, increasing borrowing costs, and slowing job creation.
“When the government consistently borrows domestically, banks and investors prefer buying government securities due to their safety,” said Uviase.
“This reduces available funds for private businesses, raises interest rates, and stifles industrial growth.”
Adonri added that the trend distorts credit markets, explaining that “excessive demand for funds by government pushes up yields and discourages productive investment.”
In the same vein, Tunde Abidoye, Head of Research at FBNQuest Merchant Bank, said, “As the government issues more debt instruments, interest rates remain elevated, making it harder for the private sector to compete for credit.”
He noted that high yields of over 20 percent on government paper have made it increasingly attractive to investors, diverting funds away from business lending and innovation.
FG Exceeds 2025 Borrowing Target: Conflict with Fiscal Framework
Financial analysts have also raised concerns that the borrowing overshoot violates the Medium-Term Fiscal Framework (2025–2027), which aims to reduce the fiscal deficit to below three percent of GDP.
Clifford Egbomeade, a public finance expert, explained that “the IMF and World Bank have repeatedly cautioned that Nigeria’s debt-service-to-revenue ratio—estimated at 83 percent in 2024—is unsustainable.”
He said: “Although macroeconomic indicators show some progress, including GDP growth of 4.2 percent and improved reserves, the fiscal imbalance persists.
The government’s borrowing pace contradicts its own fiscal consolidation goals.”
Egbomeade noted that Nigeria’s debt-service costs are rising faster than revenues, creating a cycle where new borrowings are used primarily to service existing debts.
Experts Urge Fiscal Reforms and Revenue Expansion
To curb the growing debt burden, experts have called for deeper fiscal and tax reforms, emphasizing the need to cut wasteful spending and strengthen revenue mobilization.
Adonri advised that the government should reduce its involvement in commercial sectors that could be handled by private investors.
“Nigeria’s fiscal position can only improve when the government ends perennial deficit budgeting,” he said.
Abidoye urged the Federal Government to implement stricter expenditure controls.
“Plugging leakages, trimming overheads, and enforcing accountability across ministries are critical steps to reducing fiscal pressure,” he stated.
Meanwhile, Egbomeade stressed that improving non-oil revenue remains key to long-term fiscal stability.
“Broadening VAT collection, expanding digital tax systems, and improving compliance in the informal sector can significantly reduce borrowing needs,” he noted.
He further suggested that the Debt Management Office (DMO) rebalance borrowing toward longer-tenor, concessional loans to minimize refinancing risks and strengthen debt sustainability.
As FG exceeds 2025 borrowing target by a wide margin, the nation faces a defining fiscal challenge. Without decisive reforms to boost revenue and curb excessive expenditure, analysts warn that Nigeria could slide deeper into a debt-dependent economy where future budgets are driven more by borrowing than productivity.
The call for fiscal prudence, therefore, has never been more urgent — not just to stabilize the economy but to secure Nigeria’s long-term growth and investment potential.
