Critics Slam Nigeria’s N11T Budget Hike
Nigeria’s Federal Government has significantly expanded its borrowing plan for 2026, pushing total debt financing to N29.20 trillion, a sharp jump of N11.31 trillion from the N17.89 trillion projection that appeared in the Abridged Budget Call Circular issued by the Federal Ministry of Budget and Economic Planning in December 2025.
The revised figure is contained in the 2026 Appropriation Bill approved by the National Assembly and detailed in the House of Representatives Order Paper dated March 31, 2026.
The upward revision is underpinned by a widening fiscal gap. Total spending for 2026 is now estimated at N68.32 trillion, against aggregate revenues projected at N36.87 trillion, leaving a deficit of N31.46 trillion. Nigeria’s total public debt stood at approximately $103.94 billion as of September 30, 2025, according to the Debt Management Office.
A breakdown of the revenue projection shows that the Federal Government expects N25.92 trillion as its share of gross federation revenues, N4.31 trillion from independent revenues, and N5.85 trillion from government-owned enterprises. Aid and grants are put at N1.37 trillion, with N300 billion from special funds.
On the expenditure side, debt service alone will account for N15.81 trillion, making it among the largest spending components. Recurrent non-debt expenditure stands at N15.43 trillion, while capital expenditure is estimated at N32.29 trillion. Statutory transfers are put at N4.80 trillion. Domestic debt service is projected at N10.16 trillion, with foreign debt service at N5.36 trillion.
An analysis of the Medium-Term Expenditure Framework shows that approximately 46 percent of projected government revenues will go toward debt servicing in 2026, leaving limited fiscal space for critical development investment.
Beyond borrowing, asset sales and privatisation are projected at N189.16 billion, while multilateral and bilateral project-tied loans are expected to contribute N2.05 trillion, relatively modest figures against the scale of the financing gap.
The National Assembly’s approval followed President Bola Tinubu’s request for a N9.09 trillion increase in the 2026 budget, partly financed through crude oil gains linked to elevated global oil prices. The oil price benchmark for the 2026 budget was set at $64.85 per barrel, but Brent crude has since risen sharply to around $115 per barrel following the outbreak of conflict in the Middle East, generating revenues that are roughly twice the budget benchmark. The approved total of N68.32 trillion represents approximately N1 trillion above the executive’s original request.
Lawmakers cited the need to clear legacy obligations, fund infrastructure, strengthen the judiciary, boost healthcare, and support preparations for the 2027 general elections as justification for the increase. To bridge the financing gap, the legislature also approved an increase in external borrowing by N6.163 trillion, with lawmakers insisting the debt level remains within manageable limits.
In parallel, the Senate considered presidential requests for external loans totalling $6 billion, including a $5 billion Structured Total Return Swap financing programme with First Abu Dhabi Bank in the United Arab Emirates, designed to enhance liquidity, support budget implementation, refinance existing debts, and fund infrastructure. A separate $1 billion facility backed by UK Export Finance was sought to rehabilitate the Apapa and Tin Can Island ports in Lagos.
President Tinubu, in his correspondence to the National Assembly, acknowledged that the fresh borrowing would increase Nigeria’s public debt stock, currently estimated at about $115 billion, with debt servicing projected at N20.5 trillion in 2026, but assured lawmakers that the phased structure of the facilities would help manage their impact.
The loan approvals drew criticism from various quarters. Former Vice President Atiku Abubakar, the Peoples Democratic Party’s 2023 presidential candidate, described the Senate’s swift approval as “not just troubling but alarming,” warning that the decisions could further burden Nigeria’s strained economy. “Borrowing is not inherently wrong, but reckless borrowing, enabled by legislative complacency, is dangerous. Nigeria is not a private enterprise to be leveraged at will. The future of our nation cannot be signed away in a matter of hours,” he said in a public statement.
Young Progressives Party presidential aspirant Olajide Filani also questioned the direction of fiscal policy. “A nation benefiting from improved oil earnings should not be sinking deeper into debt,” he said, warning that borrowing to service existing debts was both unsustainable and dangerous.
The Centre for the Promotion of Private Enterprise’s Chief Executive Officer, Dr Muda Yusuf, cautioned against jeopardising the macroeconomic stability recently achieved. He warned of the risk of a debt trap, noting that “high levels of deficits and high levels of debt can choke the fiscal space and lead to a kind of vicious circle of debt,” and urged the government to use improving revenues to reduce the deficit rather than expand it.
National Economic Society President Prof Adeola Adenikinju questioned the quality of government spending, noting that capital releases often arrive too late in the year to deliver meaningful outcomes.
BudgIT’s Acting Country Director Joseph Amenaghawon was equally critical, arguing that loans were being used for recurrent spending rather than transformative projects. “The result is debt without development. The cycle where the burden grows but the benefits do not,” he said at a national debt dialogue in Abuja. “What we face today is not simply a debt problem but a structural development crisis, a crisis of priorities, a crisis of governance, a crisis of vision,” he added.
Development economist Dr Aliyu Ilias warned that the scale of new borrowing could worsen inflation and cost of living pressures. “We already have issues of debt service. You look at our budget, about N15 trillion is needed to service debt, and now we’re incurring more,” he said, adding that if not well managed, increased liquidity from borrowing could stoke inflation and further pressure the exchange rate. He urged the government to focus on boosting oil output and trade performance as alternatives.