• N17.4trn borrowed in 10 months as domestic debt surges
• Experts warn of debt trap, crowding out of private sector
• Urge fiscal discipline, spending cuts

The Federal Government (FG) has borrowed ₦17.36 trillion from domestic and external sources in the first ten months of 2025, surpassing its prorated borrowing target by 55.6 percent, according to data from the Debt Management Office (DMO) and the Central Bank of Nigeria (CBN).

The 2025 Appropriation Act projected total borrowing of ₦13.08 trillion for the full year — equivalent to ₦10.9 trillion on a ten-month prorated basis. However, domestic borrowing reached ₦15.8 trillion by October, while external loans stood at ₦1.56 trillion by mid-year.

With an additional $2.35 billion (₦3.38 trillion) Eurobond issuance now underway, total borrowing could climb to ₦20.74 trillion. Analysts project that overall borrowing may approach ₦23 trillion by December, representing nearly an 80 percent overshoot of the initial budget target.

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Analysts Raise Alarm over Fiscal Indiscipline

Experts have described the development as a worrying sign of fiscal indiscipline, warning that it heightens the risk of a debt crisis, erodes investor confidence, and crowds out private sector credit.

Andrew Uviase, Managing Partner at Ecovis OUC, said the surge reflects “poor expenditure control and a lack of honesty and transparency in public spending.”

“The government appears unbothered by its spending pattern. Without stricter fiscal control, borrowing will continue to rise unsustainably,” he warned.

David Adonri, Vice Executive Chairman of Highcap Securities, blamed “aggressive and unrealistic revenue assumptions” in the budget, especially oil projections of 2.06 million barrels per day at $75 per barrel.

“Actual output has hovered around 1.6–1.7 million barrels, while prices have dropped to about $65. This unrealistic foundation drives continuous deficit financing,” Adonri said, describing the government’s borrowing habit as “a fiscal narcotic.”

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Rising Debt Crowding Out Private Sector

Experts warn that the Federal Government’s heavy presence in the debt market is driving up interest rates and limiting credit to businesses.

“The government’s excessive demand for domestic credit distorts market pricing,” Adonri said. “Lenders now prefer risk-free government securities over private ventures, stifling real-sector investment.”

Uviase added that “when government borrows insatiably, financial institutions naturally favour sovereign instruments. This leaves private businesses starved of credit, driving up costs and threatening jobs.”

Tunde Abidoye, Head of Research at FBNQuest Merchant Bank, noted that increased issuance of government securities has “kept yields elevated above 20 percent,” making it harder for the private sector to compete for funds.

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Debt Burden, IMF Warnings Persist

The borrowing overshoot contradicts the Medium-Term Fiscal Framework (2025–2027), which targets a deficit below 3 percent of GDP, and IMF/World Bank recommendations urging stronger fiscal discipline.

The institutions have repeatedly warned that Nigeria’s debt-service-to-revenue ratio, estimated at 83 percent in 2024, remains unsustainable.

Adonri said: “As long as fiscal indiscipline persists, IMF and World Bank warnings will remain valid. The government is merely paying lip service to consolidation.”

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Experts Propose Reforms

To restore fiscal balance, analysts urged the FG to cut waste, enforce spending discipline, and boost non-oil revenue.

Uviase and Abidoye advised trimming the cost of governance, plugging leakages, and benchmarking borrowing limits against revenue rather than GDP.

Clifford Egbomeade, a public finance analyst, called for “aggressive non-oil revenue mobilisation, digital tax expansion, and rebalancing toward concessional, longer-tenor external loans.”

He added: “Without decisive reform, Nigeria risks a cycle where new borrowing merely services old debt — deepening inflationary pressures and undermining growth.”