FG Overshoots 2025 Borrowing Target by 55.6%, Adds ₦17.36 Trillion Debt in 10 Months

The Federal Government (FG) has borrowed a total of ₦17.36 trillion from both domestic and external sources between January and October 2025, exceeding its ten-month borrowing projection by ₦6.06 trillion, or 55.6 percent.

According to data from the Debt Management Office (DMO) and the Central Bank of Nigeria (CBN), the government had set a prorated borrowing target of ₦10.9 trillion for the period, based on the ₦13.08 trillion full-year borrowing limit approved in the 2025 Appropriation Act.

A breakdown shows that the FG sourced ₦15.8 trillion domestically as of October 2025 and ₦1.56 trillion externally within the first half of the year.

However, plans are already underway to raise another $2.35 billion (₦3.38 trillion) through a Eurobond issuance, which would push total borrowing to ₦20.74 trillion — and potentially close to ₦23 trillion by year-end.

Analysts warn that this would leave the government with an ₦10 trillion borrowing excess, about 80% above the legal threshold, posing serious risks to fiscal stability, private sector growth, and investor confidence.

Overspending amid weak revenue

Under the 2025 budget, the Federal Government projected ₦54.99 trillion in expenditure and ₦41.91 trillion in revenue, creating a deficit of ₦13.08 trillion, to be financed by borrowing.

However, the government has now surpassed its deficit financing benchmark long before year-end, raising concerns over fiscal indiscipline.

The DMO data shows that between January and October 2025, the government borrowed:

• ₦11.43 trillion through Treasury Bills, up 4.6% year-on-year;
• ₦4.04 trillion through FGN Bonds, down 22% from 2024;
• ₦40.19 billion via FGN Savings Bonds, up 5.6%;
• ₦300 billion through Sukuk Bonds, compared to zero issuance in 2024.

Analysts decry fiscal indiscipline

Economists have described the government’s borrowing spree as a sign of poor expenditure control and weak fiscal discipline.

Andrew Uviase, Managing Partner at Ecovis OUC, said:

“The escalating borrowing reflects fiscal indiscipline and poor expenditure control. The government must urgently reduce the cost of governance. Without transparency and honesty, excessive borrowing will persist.”

He noted that despite improved tax collections by the Federal Inland Revenue Service (FIRS), non-oil revenues remain weak, largely due to insecurity and sluggish productivity in key sectors.

David Adonri, Vice Executive Chairman of Highcap Securities, attributed the rising debt to “unrealistic revenue assumptions”, especially in the oil sector.

“The 2025 budget was anchored on producing 2.06 million barrels per day at $75 per barrel — both overly optimistic. Actual production is around 1.6–1.7 million barrels, while prices have fallen to about $65,” he said.

Adonri described the government’s approach as “an addiction to debt,” warning that continued fiscal recklessness could trap the economy in a debt spiral.

Similarly, Tunde Abidoye, Head of Research at FBNQuest Merchant Bank, said over-optimistic oil benchmarks have forced the FG into excessive borrowing, leading to crowding out of private sector credit.

Impact on economy and private sector

Analysts warn that the government’s growing appetite for domestic debt is squeezing credit availability to businesses and driving up interest rates.

Adonri noted:

“Excessive borrowing by government raises the cost of funds and crowds out private investment. Lenders prefer risk-free government instruments, which hurts the real economy.”

Uviase added that unchecked borrowing could trap Nigeria in a cycle of debt repayment, with new loans merely funding existing obligations.

Clifford Egbomeade, a public finance analyst, said double-digit bond yields above 20%, coupled with delayed Eurobond issuance, have pushed the government into reactive liquidity borrowing rather than strategic deficit management.

“Between January and August 2025, the CBN raised ₦26.4 trillion through T-bills and OMO operations — up nearly 57% year-on-year — indicating how government borrowing is absorbing domestic liquidity,” he said.

He warned that while the approach offers short-term relief, it worsens long-term debt vulnerability and weakens private sector credit access.

Conflict with fiscal consolidation and IMF warnings

Experts say the borrowing overshoot directly contradicts the Medium-Term Fiscal Framework (2025–2027), which aims to reduce the budget deficit to below 3% of GDP.

They also cited repeated warnings from the IMF and World Bank about Nigeria’s unsustainable debt-service-to-revenue ratio, estimated at 83% in 2024.

Adonri said:

“The government keeps paying lip service to fiscal consolidation. As long as this indiscipline continues, IMF and World Bank warnings will remain valid.”

Egbomeade added:

“Despite modest GDP growth of 4.23% and inflation easing to 18%, the government’s ballooning expenditure of ₦54.99 trillion undermines fiscal credibility.”

Way forward: cutting costs, boosting revenue

Analysts have urged the government to adopt a more disciplined fiscal strategy by curbing waste, reducing recurrent expenditure, and deepening non-oil revenue mobilisation.

Adonri advised:

“The government should withdraw from sectors better managed by the private sector. Ending perennial deficit budgeting will strengthen fiscal sustainability.”

Abidoye noted that new tax measures — such as the 30% capital gains tax and a 15% minimum effective tax rate for large firms — could improve revenue, but warned against overtaxing the productive sector.

Egbomeade recommended shifting toward longer-tenor, concessional external loans, fast-tracking digital tax systems, and cutting governance costs to stabilize debt servicing.

“Sustained fiscal and tax reforms are critical if Nigeria wants to move from debt-driven recovery to sustainable, investment-led growth,” he concluded.

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