FG Exceeds 2025 Borrowing Target by 55.6%, Raises N17.36 Trillion in 10 Months

FG Exceeds 2025 Borrowing Target by 55.6%, Raises N17.36 Trillion in 10 Months

The Federal Government (FG) has borrowed N17.36 trillion from both domestic and external sources within the first ten months of 2025, surpassing its prorated borrowing limit by N6.06 trillion, or 55.6%, according to data from the Debt Management Office (DMO) and the Central Bank of Nigeria (CBN).

Under the 2025 Appropriation Act, the government’s total approved borrowing for the year stands at N13.08 trillion, with a prorated target of N10.9 trillion for the ten-month period.

Breakdown of Borrowings

As of October 2025, the government had raised N15.8 trillion domestically through instruments such as FGN Bonds, Treasury Bills, Savings Bonds, and Sukuk. External borrowing stood at N1.56 trillion as of mid-year.

Last week, the FG also announced plans to raise an additional $2.35 billion (N3.38 trillion) through a Eurobond issuance, which would push total borrowing to about N20.74 trillion. Analysts project that, based on ongoing borrowing trends, total debt accumulation for 2025 could reach N23 trillion—roughly 80% above the full-year budgetary limit.

Fiscal Context

The 2025 budget projects N54.99 trillion in expenditure against N41.91 trillion in revenue, leaving a N13.08 trilliondeficit to be financed through borrowing.

DMO data show that Treasury Bill issuances rose 4.6% year-on-year to N11.43 trillion, while borrowings through FGN Bonds dropped 22% to N4.04 trillion. The FG Savings Bond increased 5.6% to N40.19 billion, while Sukuk Bond issuance reached N300 billion, compared to none in the same period of 2024.

Analysts React

Experts have described the government’s aggressive borrowing as evidence of fiscal indiscipline and poor expenditure control.

“The government is not showing sufficient concern about its spending pattern,” said Andrew Uviase, Managing Partner at Ecovis OUC. “Without transparency and a commitment to reduce the cost of governance, excessive borrowing will persist.”

Uviase added that while tax collection has improved, non-oil revenues remain weak, partly due to insecurity hampering agriculture and other productive activities.

David Adonri, Vice Executive Chairman of Highcap Securities, blamed the surge on “unrealistic revenue assumptions,” especially in the oil sector.

“The budget was based on an oil output of 2.06 million barrels per day at $75 per barrel, but production has averaged only 1.6–1.7 million barrels, and prices have dropped to around $65,” he said.

Adonri described the FG’s dependence on debt as “a fiscal addiction” that undermines consolidation efforts, while Tunde Abidoye of FBNQuest Merchant Bank called the oil price benchmarks “overly optimistic,” leading inevitably to shortfalls and higher borrowing.

Public analyst Clifford Egbomeade attributed the overshoot to weak non-oil revenue and ballooning debt-service costs.

“High domestic bond yields of over 20% and delayed Eurobond issuance due to global interest rates forced the government into short-term liquidity borrowing rather than strategic deficit management,” he noted.

Risks to the Private Sector and Economy

Experts warn that the FG’s heavy reliance on domestic borrowing is crowding out private sector credit, driving up interest rates, and discouraging investment.

“When the government borrows excessively, banks prefer lending to it rather than to businesses,” Uviase said. “This raises borrowing costs, weakens production, and threatens job creation.”

Adonri described the situation as a vicious debt cycle where rising government borrowing inflates yields, constrains private investment, and slows economic productivity.

Abidoye added that while high liquidity has moderated the immediate impact on rates, sustained issuance of government securities continues to tighten private credit conditions.

Egbomeade concluded that the borrowing trend offers only temporary fiscal relief while deepening long-term debt vulnerability. Between January and August 2025, the CBN raised N26.4 trillion through Treasury Bills and OMO operations—57% higher year-on-year—illustrating how much government borrowing is absorbing domestic liquidity.

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