Bolaji Idowu
The Federal Government plans to borrow N17.89tn to fund the 2026 budget, according to the 2026 budget framework obtained from the Budget Office of the Federation. The figure represents a 72 per cent increase from the N10.42tn approved for 2025.
The borrowing plan is contained in the 2026 Abridged Budget Call Circular issued by the Federal Ministry of Budget and Economic Planning. The document shows that the projected fiscal deficit will rise from N14.10tn in 2025 to N20.12tn in 2026, an increase of 43 per cent.
Available revenue for the federal budget, excluding retained earnings of government-owned enterprises, is expected to drop from N38.02tn in 2025 to N29.35tn in 2026. Revenue is projected to rise to N31.53tn in 2027 and N34.90tn in 2028.
Of the planned N17.89tn borrowing for 2026, N14.31tn will be sourced domestically, while N3.58tn will come from external creditors. The 80:20 domestic–external borrowing ratio is expected to continue in subsequent years. In 2027, the government plans total borrowing of N21.18tn, comprising N16.94tn in domestic debt and N4.24tn in external loans. Planned borrowing for 2028 stands at N15.84tn, with N12.67tn expected from domestic sources and N3.17tn from external creditors.
Total borrowing for the three-year period from 2026 to 2028 will amount to N54.91tn, of which N43.92tn will be raised locally and N10.98tn externally.
Debt service is projected at N15.52tn in 2026, up from N13.94tn in 2025. The debt service-to-revenue ratio is expected to increase from 34 per cent in 2025 to 45 per cent in 2026, before rising to 53 per cent in 2027 and falling to 47 per cent in 2028.
Total federal expenditure is projected at N54.46tn in 2026, slightly down from N54.99tn in 2025. Recurrent non-debt expenditure is expected to rise from N13.59tn to N15.27tn, while capital expenditure will fall from N26.19tn to N22.37tn, partly due to a directive requiring ministries and departments to roll over 70 per cent of their 2025 capital allocations into 2026.
Privatisation proceeds are projected at N189.16bn in 2026, down from N312.33bn in 2025. The figure is expected to rise to N197.23bn in 2027 and N486.54bn in 2028.
Reacting to the figures, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, warned that rising deficits and debt levels could undermine macroeconomic stability. The President of the Nigerian Economic Society, Prof. Adeola Adenikinju, cautioned that heavy domestic borrowing could crowd out the private sector and raise interest rates.
At a national debt dialogue in Abuja on Tuesday, Programme Manager of the Sustainable Nigeria Programme at Heinrich Böll Stiftung, Mr Ikenna Ofoegbu, noted that Nigeria’s rising debt posed long-term risks for future generations and highlighted the impact of climate-related disasters on infrastructure and public finances.