Over the next three years, the Federal Government intends to devote a larger percentage of its budget to debt servicing than to capital expenditures.
The newly authorised 2025–2027 Medium-Term Expenditure Framework and Fiscal Strategy Paper supports this.
The government also aims to borrow an additional N31.24 trillion over the next three years to finance its spending goals.
This will increase Nigeria’s already high debt load, which as of June 2024 was N134.3 trillion. In the event that this borrowing pattern persists, Nigeria’s debt load may approach N170 trillion by 2027.
Nigeria’s debt-to-revenue ratio can become even more unmanageable as a result of the anticipated borrowing, which will mostly be used to pay for budget deficits and other expenses.
In 2025, the government plans to borrow N9.22 trillion, which will rise to N8.78 trillion in 2026 and N13.24 trillion in 2027.
The majority of the N31.24 trillion will come from local borrowing (N24.98 trillion), with international borrowing making up the remaining N6.25 trillion.
The estimated amount of domestic borrowing for 2025 is N7.37 trillion, or 80% of the total projected borrowing amount, while the amount of international borrowing is N1.84 trillion.
With domestic borrowing projected to reach N8.78 trillion in 2026 and N10.59 trillion in 2027, this trend is anticipated to continue.
Conversely, foreign loans would increase somewhat, from N1.76 trillion in 2026 to N2.65 trillion in 2027.
The government’s growing budget deficits, which are expected to reach N13.08 trillion in 2025, N12.14 trillion in 2026, and N13.76 trillion in 2027, would be financed by the new borrowings.
