FG Exceeds 2025 Borrowing Target by 55.6%, Raising Debt Sustainability Concerns
The Federal Government of Nigeria has borrowed N17.36 trillion from domestic and foreign sources in the first ten months of 2025, exceeding the prorated borrowing target of N10.9 trillion under the 2025 Appropriation Act by 55.6 percent. This surge in borrowing comes as the government prepares to raise an additional $2.35 billion (N3.384 trillion) through a Eurobond issuance, potentially pushing total borrowing for the year to nearly N23 trillion—about 80 percent above the approved budget.
A breakdown of the borrowings reveals that N15.8 trillion came from domestic sources, with N11.43 trillion raised through Treasury Bills, N4.04 trillion via FGN Bonds, N40.19 billion from FGN Savings Bonds, and N300 billion from Sukuk Bonds. External borrowing so far stands at N1.56 trillion. Analysts warn that such aggressive borrowing, amid weak revenue performance, could trap Nigeria in a self-reinforcing debt cycle and undermine investor confidence.
Experts highlight that excessive borrowing is increasingly crowding out private sector credit, raising interest rates, and slowing economic growth. David Adonri of Highcap Securities noted that lenders prefer government securities over private ventures due to higher yields, limiting investment in manufacturing and other productive sectors. Similarly, Tunde Abidoye of FBNQuest Merchant Bank emphasized that the rise in government paper reduces credit flow to businesses, weakening medium-term growth prospects.
The surge in borrowing also contradicts fiscal consolidation goals outlined in Nigeria’s Medium-Term Fiscal Framework and IMF recommendations. Analysts say the government’s debt-to-revenue ratio, estimated at 83 percent in 2024, remains unsustainable. Andrew Uviase of Ecovis OUC described the borrowing overshoot as “a clear reflection of fiscal indiscipline and poor expenditure control,” urging stricter spending discipline to prevent further economic strain.
To address these concerns, experts call on the Federal Government to cut wasteful spending, improve tax and non-oil revenue mobilisation, and rebalance borrowing toward longer-term, concessional external loans. Clifford Egbomeade, a public analyst, emphasized the need for strategic fiscal reforms, warning that without sustained revenue and expenditure discipline, Nigeria risks turning its debt-driven recovery into a fragile, unsustainable cycle that could stifle jobs, business growth, and the overall cost of living.
source: vanguard