Nigeria Raises 2026 Borrowing Plan 63% to ₦29.2 Trillion as Deficit Hits ₦31.46 Trillion

Nigeria Raises 2026 Borrowing Plan 63% to ₦29.2 Trillion as Deficit Hits ₦31.46 Trillion

Quick Reads

• Nigeria’s Federal Government has revised its 2026 borrowing plan sharply upward to ₦29.20 trillion, up from an earlier estimate of ₦17.89 trillion, after the National Assembly approved an expanded budget on March 31, 2026.
• The 2026 fiscal deficit has widened to ₦31.46 trillion, driven by total projected expenditure of ₦68.32 trillion against revenues of just ₦36.87 trillion.
• Debt service alone is projected at ₦15.81 trillion in 2026, meaning Nigeria will spend more on servicing existing debt than on recurrent government operations.
• The Senate has separately approved President Tinubu’s request for a fresh $6 billion external loan package, including $5 billion from Abu Dhabi’s First Abu Dhabi Bank and $1 billion from Citi Bank for Lagos port rehabilitation.
• Economists are warning of a debt trap, with Nigeria’s debt-to-revenue ratio already at 58% and the debt-servicing burden projected to consume as much as 45% of government revenue in 2026.

Nigeria’s Federal Government has significantly widened its borrowing programme for 2026, increasing planned loans by ₦11.31 trillion to ₦29.20 trillion, up from an earlier projection of ₦17.89 trillion contained in the 2026 Abridged Budget Call Circular issued in December 2025. The revision follows the National Assembly’s approval of an expanded spending framework, with total government expenditure now projected at ₦68.32 trillion against revenues of ₦36.87 trillion, leaving a deficit of ₦31.46 trillion.

The scale of this revision reflects how dramatically the fiscal picture has shifted since the budget was first presented. The new borrowing requirement is outlined in the 2026 Appropriation Bill, approved by the National Assembly and detailed in the House of Representatives’ Order Paper dated March 31, 2026. To close part of the gap, lawmakers moved to boost revenue from multiple directions raising the oil benchmark by $10 per barrel, expected to generate ₦2.592 trillion in additional revenue, and projecting higher telecom tax contributions, with MTN Nigeria expected to pay ₦724 billion and Airtel Nigeria ₦150 billion in company income tax. Despite these measures, the numbers still did not close. Lawmakers approved an increase in external borrowing by ₦6.163 trillion to bridge the shortfall, describing the resulting debt level as remaining within manageable limits.

The debt-service burden sits at the heart of analyst concern. Debt service is projected at ₦15.81 trillion, split between ₦10.16 trillion for domestic obligations and ₦5.36 trillion for foreign debt. That figure has grown from ₦942 billion in 2014 to ₦4.2 trillion in 2021, reached ₦12.6 trillion in 2024, and is now forecast to exceed ₦15 trillion in 2026. Budgit Beyond debt service, capital expenditure is projected at ₦32.29 trillion, with lawmakers citing the need to clear legacy obligations, fund infrastructure, strengthen the judiciary, boost healthcare, and support preparations for the 2027 general elections. However, Nigeria’s historical capital execution rate has averaged around 26–30%, raising questions about whether the scale of projected spending will translate into completed projects.

Economists are drawing a clear line between the borrowing figures and broader macroeconomic risk. Dr. Muda Yusuf, Chief Executive of the Centre for the Promotion of Private Enterprise, warned that high deficits and rising debt levels could “choke the fiscal space and lead to a kind of vicious circle of debt,” and urged the government to use improving revenue performance to reduce rather than expand borrowing. Professor Adeola Adenikinju of the Nigerian Economic Society added that heavy domestic borrowing risks pushing up local interest rates, reducing private sector access to credit, and slowing business investment. Civil society groups have been equally direct. BudgIT’s Joseph Amenaghawon argued that borrowing has not been translating into development, saying “the result is debt without development a generation borrowed but not invested in. Former presidential candidate Atiku Abubakar, meanwhile, described the Senate’s swift approval of the fresh external loan as “not just troubling but alarming,” warning it could mortgage the future of generations yet unborn.

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