By Enemona Samuel Endurance
The Federal Government of Nigeria has increased its planned borrowing for 2026 to N29.20 trillion following a significant expansion in the proposed budget size and fiscal deficit.
The revised borrowing figure represents an increase of N11.31 trillion compared to the earlier projection of N17.89 trillion contained in the 2026 Abridged Budget Call Circular released in December 2025.
The updated estimate is captured in the 2026 Appropriation Bill approved by the National Assembly and detailed in the House of Representatives’ Order Paper dated March 31, 2026.
Fiscal Deficit Drives Borrowing Surge
According to official documents, the revised borrowing plan reflects a sharp increase in the fiscal deficit, now estimated at N31.46 trillion.
Total government expenditure is projected at N68.32 trillion, while revenues are expected to reach N36.87 trillion, creating a significant funding gap.
This imbalance has driven a heavier reliance on debt financing, with borrowing accounting for the bulk of deficit funding.
Other financing sources remain relatively limited, including N189.16 billion expected from asset sales and privatisation, as well as N2.05 trillion from multilateral and bilateral project-tied loans.
The earlier borrowing estimate of N17.89 trillion was based on a lower deficit projection of N20.12 trillion, highlighting the scale of the upward revision.
Revenue Growth Trails Spending Expansion
Government revenue for 2026 is projected at N36.87 trillion, supported by federation revenues, independent income, and earnings from government-owned enterprises.
- N25.92 trillion from federation revenues
- N4.31 trillion from independent revenues
- N5.85 trillion from government enterprises
- N1.37 trillion from grants and aid
- N300 billion from special funds
Despite improved revenue projections, expenditure growth has outpaced gains, contributing to the widening deficit and increased borrowing requirement.
Debt Service Pressure Intensifies
Debt servicing remains one of the most significant pressure points in the 2026 budget framework.
Debt service is projected at N15.81 trillion, making it one of the largest expenditure components.
- Domestic debt service: N10.16 trillion
- Foreign debt service: N5.36 trillion
Recurrent non-debt expenditure is estimated at N15.43 trillion, while capital expenditure stands at N32.29 trillion, reflecting a strong focus on infrastructure and development projects.
Statutory transfers are projected at N4.80 trillion.
What You Should Know
President Bola Tinubu had earlier requested the National Assembly’s approval to increase the 2026 budget by N9 trillion, raising it from N58.4 trillion to N67.4 trillion.
Lawmakers proposed a mix of revenue-enhancing measures and increased borrowing to finance the expanded budget.
A key revenue strategy includes a $10 per barrel increase in the oil benchmark, expected to generate about N2.59 trillion in additional revenue.
The telecommunications sector is also projected to contribute significantly, with MTN Nigeria expected to generate N724 billion in company income tax, while Airtel Nigeria is projected to contribute N150 billion.
Despite these measures, lawmakers approved an additional N6.16 trillion in external borrowing to bridge the financing gap, noting that the overall debt level remains within manageable limits.
However, the growing reliance on borrowing continues to raise concerns about Nigeria’s rising debt burden and long-term fiscal sustainability.