The Federal Government plans to borrow N17.89tn in 2026 to fund a widening budget deficit as revenue projections fall sharply below expenditure needs, according to the 2026 budget framework obtained from the Budget Office of the Federation.
Official figures in the 2026 Abridged Budget Call Circular issued by the Federal Ministry of Budget and Economic Planning show that total new borrowing will jump from N10.42tn in 2025 to N17.89tn in 2026.
This is an increase of N7.46tn (72 per cent) in fresh loans over one year, amid concerns over rising debt costs.The PUNCH further observed that the bulk of the 2026 borrowing will come from domestic creditors.
The document shows that of the planned N17.89tn new loans for 2026, N14.31tn will be raised from the domestic market, while N3.58tn will be sourced from external creditors.Domestic borrowing, therefore, accounts for 80 per cent of new loans in 2026, while foreign borrowing contributes 20 per cent.
The circular, signed by the Director-General of the Budget Office, Mr Tanimu Yakubu, on December 4, 2025, provides guidelines for Ministries, Departments, and Agencies to prepare their 2026 budget proposals.
It noted that the Federal Executive Council had approved the 2026–2028 Medium-Term Expenditure Framework and Fiscal Strategy Paper on December 3, 2025, after a presentation by the Minister of Budget and Economic Planning, Mr Atiku Bagudu.
The framework projects total federal spending of N54.5tn for 2026, with revenues estimated at N34.33tn, resulting in a deficit of N20.1tn, or 3.61 per cent of GDP.Debt servicing alone is projected to gulp N15.9tn, leaving limited fiscal space for capital investments.
From 2026 to 2027, total new borrowing rises from N17.89tn to N21.18tn, an increase of about N3.29tn or roughly 18 per cent.The document also shows that the government plans to roll over about 70 per cent of the 2025 capital budget into 2026 due to implementation challenges.Economists have expressed worries over the escalating debt trajectory, with Nigeria's public debt stock already standing at N152tn as of mid-2025.
Mr Bismarck Rewane, Chief Executive Officer of Financial Derivatives Company Ltd, said, "The aggressive borrowing plan underscores the fragility of Nigeria's fiscal position. With debt service crowding out productive spending, growth remains anaemic."
The National Assembly is expected to review and approve the borrowing plan alongside the full 2026 budget proposal, which President Bola Tinubu is slated to present in the coming weeks.
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