The Federal Government has dramatically revised its 2026 borrowing plan upward by ₦11.31trillion, pushing total planned borrowings to ₦29.20trillion.
The new figure marks a sharp departure from the ₦17.89 trillion projection outlined in the Abridged Budget Call Circular issued by the Ministry of Budget and Economic Planning in December 2025.
The revision, contained in the 2026 Appropriation Bill passed by the National Assembly, was detailed in the House of Representatives Order Paper dated Tuesday, March 31, 2026. It reflects a broader expansion of the national budget and a widening fiscal gap driven by ambitious spending targets amid efforts to boost revenues through oil and telecom sector reforms.
The fiscal deficit has now swelled to an estimated ₦31.46 trillion — up substantially from the earlier projection of ₦20.12 trillion. Total government expenditure is projected at ₦68.32 trillion, while aggregate revenues are expected to reach ₦36.87 trillion, leaving a substantial financing gap that will be bridged largely through new borrowings.
Other sources of financing include ₦189.16 billion from asset sales and privatisation proceeds, as well as ₦2.05 trillion in multilateral and bilateral project-tied loans. The surge in borrowing needs underscores the government’s determination to fund a record capital programme even as revenue inflows, though improved, fall short of expenditure demands.
Government revenue for 2026 is now pegged at ₦36.87 trillion, drawing from federation revenues (₦25.92 trillion), independent revenues (₦4.31 trillion), and earnings from government-owned enterprises (₦5.85 trillion). Additional inflows include ₦1.37 trillion in grants and aid, plus ₦300 billion from special funds.
The upward revision in the overall budget size stems directly from a request by President Bola Tinubu. In a letter to Senate President Godswill Akpabio, read during plenary last Tuesday, the President sought approval for a ₦9 trillion increase, lifting the total budget from ₦58.4 trillion to ₦67.4 trillion (with final figures settling near ₦68.32 trillion). The primary driver: a $10 per barrel upward adjustment in the oil price benchmark, expected to generate an extra ₦2.592 trillion in revenue.
Lawmakers also pointed to stronger contributions from the telecommunications sector, buoyed by recent tariff adjustments and policy reforms. Projections show MTN Nigeria contributing ₦724 billion in company income tax and Airtel Nigeria ₦150 billion — together delivering ₦874 billion in additional revenue from the sector.
Despite these revenue-enhancing measures, the National Assembly still approved a ₦6.163 trillion increase in external borrowing to close the remaining shortfall.
On the expenditure side, debt servicing emerges as one of the largest single items, consuming ₦15.81 trillion — equivalent to roughly 23 per cent of the entire budget. Of this, domestic debt service accounts for ₦10.16 trillion, while foreign obligations stand at ₦5.36 trillion, highlighting the mounting cost of both local and external borrowings accumulated in recent years.
Recurrent non-debt expenditure is estimated at ₦15.43 trillion, capital expenditure at a robust ₦32.29 trillion (signalling heavy investment in infrastructure and legacy projects), and statutory transfers at ₦4.80 trillion.
The government has described the revised debt levels as remaining within “manageable limits,” citing improved revenue projections and the productive nature of some borrowings tied to capital projects. Critics, however, warn that sustained high borrowing could exacerbate Nigeria’s already elevated debt burden, with debt service potentially crowding out critical investments in health, education, and social welfare.
The 2026 budget represents a continuation of the Tinubu administration’s reform-driven fiscal policy, building on subsidy removal and exchange rate unification that have delivered higher oil revenues and telecom taxes but also fuelled inflationary pressures and living-cost challenges for ordinary Nigerians.
The National Assembly’s swift approval of the expanded borrowing plan signals broad legislative backing for the administration’s growth agenda. Yet the scale of the deficit — nearly half the size of total expenditure — will test the government’s ability to attract concessional financing and maintain investor confidence in Nigeria’s debt sustainability.
As the 2026 fiscal year approaches, analysts will be watching closely whether the projected revenue upside from oil and digital sectors materialises, or whether further borrowing becomes necessary.
For now, the message from Abuja is clear: bigger ambitions demand bigger financing — even if it means leaning more heavily on the debt markets.
WHAT YOU SHOULD KNOW
Nigeria’s 2026 budget has ballooned significantly, with the Federal Government raising its borrowing plan by ₦11.31 trillion to ₦29.20 trillion, pushing the fiscal deficit to ₦31.46 trillion against total expenditure of ₦68.32 trillion and revenue of ₦36.87 trillion.
Despite expected revenue boosts from a higher oil price benchmark and stronger telecom taxes (including ₦874 billion from MTN and Airtel), the National Assembly still approved a sharp increase in external borrowing — ₦6.163 trillion more — to fund the ambitious ₦32.29 trillion capital expenditure and ₦15.81 trillion debt service obligations.
In essence, even with improved revenue projections, Nigeria is choosing to borrow heavily to finance its expanded spending, keeping debt levels officially described as “manageable.”
