The Federal Government recorded N11.89 trillion in fresh borrowings in the first nine months of 2025 but spent only N3.10 trillion on capital expenditure.
This is according to figures contained in the 2025 third-quarter Budget Implementation Report recently released by the Budget Office of the Federation.
The borrowings comprised N7.08 trillion in domestic loans and N4.81 trillion in multilateral and bilateral project-tied loans.
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No foreign borrowing was recorded during the period despite a N1.38 trillion provision for the item in the three-quarter budget.
The actual borrowing exceeded the projected N10.34 trillion for the first three quarters by N1.54 trillion, representing 14.91 per cent. However, total capital expenditure of N3.10 trillion accounted for only 17.66 per cent of the N17.58 trillion budgeted for the period, leaving a shortfall of N14.48 trillion, or 82.34 per cent.
The report showed that total deficit-financing items stood at N12.07 trillion in the first three quarters of 2025, exceeding the budgeted N10.58 trillion by N1.49 trillion, or 14.12 per cent.
Domestic borrowing accounted for N7.08 trillion, surpassing the N6.44 trillion budget by N639.89 billion, or 9.94 per cent.
Multilateral and bilateral project-tied loans performed significantly above target, reaching N4.81 trillion against a three-quarter projection of N2.52 trillion. This represented an excess of N2.28 trillion, or 90.54 per cent.
The Budget Office said the third-quarter deficit was financed through “privatisation proceeds and domestic borrowing.” It added that available financing items included domestic borrowing of N970 billion, privatisation proceeds of N120.61 billion, and multilateral/bilateral project-tied loans of N3.13 trillion during the quarter.
Despite the high level of borrowing, capital expenditure remained far below budget projections.
Total capital expenditure stood at N3.10 trillion in the first nine months of the year, compared with the N17.58 trillion budgeted. This means the government spent only about N17.66 out of every N100 allocated for capital projects.
Capital expenditure by Ministries, Departments and Agencies (MDAs), as well as other government bodies, was particularly weak at N1.21 trillion against a target of N13.90 trillion. This represented a shortfall of N12.69 trillion, or 91.31 per cent.
Capital expenditure by government-owned enterprises stood at N615.68 billion, matching the budget provision, while grants and donor-funded projects outperformed projections at N1.08 trillion, compared with the projected N541.43 billion.
However, the capital expenditure line for multilateral and bilateral project-tied loans recorded zero spending despite a budget provision of N2.52 trillion under that category.
The data showed a wide gap between borrowing and project execution.
The N11.89 trillion in fresh loans was about 3.83 times the N3.10 trillion spent on capital projects. Put differently, capital spending represented only 26.13 per cent of total borrowings recorded during the period.
The report attributed slow capital releases to the bottom-up cash release process, resource availability, and government priorities. It stated that N780.28 billion was released to MDAs and other agencies for 2025 capital projects and programmes in the third quarter.
Meanwhile, the Federal Government increased its planned borrowing for 2026 to N29.20 trillion following an expansion in the proposed budget size and fiscal deficit.
The new borrowing projection represents an increase of N11.31 trillion compared with the earlier estimate of N17.89 trillion contained in the 2026 Abridged Budget Call Circular issued in December 2025.
Former Labour Party presidential candidate and ex-governor of Anambra State, Peter Obi, had earlier criticised the Federal Government’s borrowing strategy, arguing that it has failed to translate into economic growth or improved living standards.
His comments came amid growing concerns over Nigeria’s rising debt profile and the effectiveness of government borrowing in driving development.
