By Boluwatife Oshadiya | April 6, 2026
KEY POINTS
- Federal Government increases 2026 borrowing plan by ₦11.31tn to ₦29.2tn
- Budget deficit widens to ₦31.46tn as expenditure hits ₦68.32tn
- Debt service projected at ₦15.81tn, one of largest spending components
MAIN STORY
The Federal Government has raised its 2026 borrowing plan to ₦29.2tn, up from the earlier ₦17.89tn projection, following a significant expansion in the national budget and a widening fiscal deficit.
The revised figure, contained in the 2026 Appropriation Bill approved by the National Assembly, reflects a ₦11.31tn increase driven by higher expenditure estimates of ₦68.32tn against projected revenues of ₦36.87tn, leaving a deficit of ₦31.46tn.
Budget documents show that the bulk of the deficit will be financed through borrowing, while non-debt sources remain marginal. Asset sales and privatisation are expected to contribute ₦189.16bn, while multilateral and bilateral loans will provide ₦2.05tn.
Revenue projections are anchored on ₦25.92tn from federation revenues, ₦4.31tn in independent revenues, and ₦5.85tn from government-owned enterprises, alongside ₦1.37tn in grants and ₦300bn from special funds.
On the spending side, debt servicing is projected at ₦15.81tn, with recurrent non-debt expenditure at ₦15.43tn and capital expenditure at ₦32.29tn, signalling continued pressure on fiscal flexibility despite infrastructure allocations.
The revision follows a request by President Bola Tinubu to increase the budget by ₦9.09tn, partly funded through anticipated oil revenue gains and new borrowing.
THE ISSUES
Nigeria’s fiscal structure continues to reflect a persistent imbalance between revenue generation and expenditure growth. Despite improved revenue projections, spending expansion has outpaced gains, leading to a sharp increase in borrowing requirements.
Debt sustainability concerns remain central. With debt servicing consuming a significant portion of the budget, fiscal space for development spending is constrained. Analysts warn that reliance on borrowing to finance deficits risks creating a cycle where new debt is used to service existing obligations.
Additionally, the composition of spending raises questions about efficiency. While capital expenditure is relatively high, delayed implementation and weak project execution have historically limited its impact on economic growth.
WHAT’S BEING SAID
“Borrowing is not inherently wrong, but reckless borrowing… is dangerous. Nigeria is not a private enterprise to be leveraged at will,” said Atiku Abubakar.
“We need to worry about debt sustainability… high levels of deficits and debt can choke fiscal space,” said Muda Yusuf.
“What we are borrowing for is the key thing. If it is well managed and invested properly, then it’s not entirely bad,” said Aliyu Ilias.
WHAT’S NEXT
- The Federal Government is expected to implement revenue-enhancing measures, including adjustments in oil benchmarks and telecom sector contributions
- The National Assembly will continue oversight on borrowing execution and budget performance through 2026
- Global oil price movements and domestic production levels will determine whether projected revenues materialise
BOTTOM LINE
The Bottom Line: Nigeria’s 2026 fiscal plan underscores a growing dependence on debt to fund government operations. Without structural improvements in revenue generation and spending efficiency, the country risks tightening its fiscal constraints and amplifying long-term debt pressures.
