Nigeria's Domestic Borrowing Surges by 7.4% in Q1'26 Amid Rising Public Debt Concerns

At the backdrop of rising public debt pressure and concerns over the impact on the economy, the Federal Government (FG) increased its domestic borrowing by N8.1 trillion in the first quarter of 2026 (Q1’26), showing a 7.4 per cent rise from N7.5 trillion in the same period of 2025.

This upward trend, according to analysts, shows revenue gaps and spending indiscipline, urging the government to double down on revenue collection, cut waste and curb corruption.

Meanwhile, the World Bank has warned that the rising amount of money the Federal Government is spending to service debt is reducing its ability to fund critical infrastructure, citing the sharp decline in capital spending to 1.0 percent of GDP from 1.3 percent of GDP in 2024.

Breakdown of Domestic Borrowing in Q1’26

Data obtained by Financial Vanguard from the Central Bank of Nigeria, CBN, and the Debt Management Office, DMO, shows that the 7.4 per cent, year-on-year, YoY, increase in FG’s domestic borrowing in Q1’26 was driven by:

• 63 per cent YoY increase in borrowing through FGN Bonds, which reached N3.182 trillion in Q1’26 from N1.953 trillion in Q1’25.
• 24 per cent YoY increase in borrowing through FGN Savings Bonds, which reached N16 billion in Q1’26 from N13 billion in Q1’25.
• 12 per cent decline in borrowing through Treasury Bills, which reached N4.86 trillion in Q1’26 from N5.54 trillion in Q1’25.

Borrowing Overshoots Target

Under the Appropriation Act 2026, the Federal Government plans to borrow N29.2 trillion, to fund the gap between the revenue of N68.32 trillion and expenditure of N36.87 trillion. This indicates a quarterly borrowing target of 7.3 trillion, including external debt.

However, given the N8.1 trillion borrowed from domestic investors in Q1’26, and the $6 billion new external loans approved by the National Assembly two weeks ago, the Federal Government might again exceed its annual borrowing target in 2026.