The Federal Government has significantly increased its borrowing plan for 2026 to N29.20 trillion, following a sharp expansion in the proposed national budget, according to official documents obtained by The PUNCH.
The new figure marks an increase of N11.31 trillion compared to the earlier N17.89 trillion borrowing projection contained in the 2026 Abridged Budget Call Circular issued by the Federal Ministry of Budget and Economic Planning.
The revised borrowing estimate is embedded in the 2026 Appropriation Bill, which has been approved by the National Assembly, and is detailed in the House of Representatives Order Paper dated March 31, 2026, as well as in the budget schedule attached to the proposal.
The PUNCH reported that total debt financing for the year now stands at N29.2 trillion, reflecting a major upward revision driven by a widening fiscal deficit. Total expenditure is projected at N68.32 trillion, while aggregate revenue is estimated at N36.87 trillion, leaving a deficit of N31.46 trillion.
A breakdown of the financing structure shows that borrowing will account for the bulk of deficit funding, while alternative sources remain relatively limited. Asset sales and privatisation are projected at N189.16 billion, while multilateral and bilateral project tied loans are expected to contribute N2.05 trillion.
Earlier projections placed borrowing at N17.89 trillion based on a lower deficit estimate of N20.12 trillion in the December 2025 budget call circular. However, the latest figures indicate a steep rise in both deficit and borrowing requirements.
Revenue projections for 2026 have also increased to N36.87 trillion, driven by federation revenue, independent revenue, and earnings from government owned enterprises. The Federal Government expects N25.92 trillion from its share of federation revenue, N4.31 trillion from independent revenue, and N5.85 trillion from government owned enterprises. Additional inflows include N1.37 trillion in aid and grants, and N300 billion from special funds.
On the spending side, debt service alone will consume N15.81 trillion, making it one of the largest expenditure items in the budget. Recurrent non debt expenditure is projected at N15.43 trillion, while capital expenditure is estimated at N32.29 trillion. Statutory transfers stand at N4.80 trillion.
Despite the sizeable allocation to capital projects, analysis indicates that debt service and recurrent spending continue to dominate the budget, limiting fiscal flexibility. Domestic debt service is projected at N10.16 trillion, while foreign debt service will cost N5.36 trillion.
The increase in borrowing comes even as the government projects higher revenues than previously estimated, suggesting that spending growth is outpacing revenue gains.
President Bola Tinubu had earlier requested a N9.09 trillion increase in the 2026 budget, which lawmakers said would be financed through crude oil gains linked to geopolitical tensions and new borrowing. Analysts note that this adjustment pushed the total budget to about N68.32 trillion.
Lawmakers explained that the upward revision was aimed at settling outstanding obligations, funding infrastructure, strengthening the judiciary, improving healthcare, and preparing for the 2027 general elections. The committee also proposed revenue enhancements, including a $10 per barrel increase in the oil benchmark, expected to generate about N2.592 trillion.
Additional revenue is expected from the telecommunications sector following tariff adjustments and policy reforms, with projections indicating that MTN Nigeria may contribute N724 billion in company income tax, while Airtel Nigeria could contribute N150 billion, bringing the total to N874 billion.
Despite these measures, the National Assembly approved an increase in external borrowing by N6.163 trillion to bridge the fiscal gap, arguing that the borrowing remains within manageable limits.
However, the move has drawn criticism from opposition figures and economic experts. Former presidential candidate of the Peoples Democratic Party, Atiku Abubakar, described the approval as troubling and warned against what he called reckless borrowing.
“Borrowing is not inherently wrong, but reckless borrowing, enabled by legislative complacency, is dangerous,” Atiku said. “Nigeria is not a private enterprise to be leveraged at will. The future of our nation cannot be signed away in a matter of hours.”
Similarly, a presidential aspirant on the platform of the Young Progressives Party, Olajide Filani, called for greater transparency and fiscal discipline, warning that increased borrowing could worsen Nigeria’s debt burden despite higher oil revenues.
“A nation benefiting from improved oil earnings should not be sinking deeper into debt,” he said, adding that borrowing to service existing debt is both unsustainable and dangerous.
Economic experts have also raised concerns over the growing debt profile. The Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, warned that Nigeria risks falling into a debt trap.
“We need to worry about debt sustainability,” Yusuf said. “High levels of deficits and high levels of debt can choke the fiscal space and lead to a vicious circle of debt.”
He added that Nigeria must protect recent macroeconomic gains, warning that rising debt could trigger inflation and exchange rate pressures.
The National President of the Nigerian Economic Society, Prof Adeola Adenikinju, stressed that while debt can be beneficial if used for productive purposes, Nigeria’s spending patterns have not consistently delivered development outcomes.
Development economist and Chief Executive Officer of CSA Advisory, Dr Aliyu Ilias, also warned that the scale of borrowing could worsen inflation and increase the cost of living if not properly managed.
According to him, “When you have more money in circulation, it depends on how we manage it. It can bring inflation, and when you have inflation, it will actually increase the cost of living.”
Other stakeholders, including BudgIT and civil society actors, warned that borrowing has not translated into tangible development outcomes, with concerns that loans are increasingly being used to finance recurrent expenditure rather than infrastructure.
They cautioned that without strict monitoring, accountability, and effective implementation, Nigeria risks accumulating debt without corresponding development benefits, deepening long term economic challenges.
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