Nigeria’s fiscal management has come under fresh scrutiny after official figures showed that the Federal Government borrowed far more than planned during the first nine months of 2025 while spending only a small fraction of its capital budget.
According to the 2025 third-quarter budget implementation report released by the Budget Office of the Federation, the government borrowed a total of N11.89 trillion between January and September 2025. This amount exceeded the projected borrowing target of N10.34 trillion by N1.54 trillion, representing an increase of nearly 15 per cent above the original estimate.
Despite the heavy borrowing, capital spending remained very low. The report revealed that only N3.10 trillion was spent on capital projects out of the N17.58 trillion allocated for infrastructure and development programmes during the period. This means just 17.66 per cent of the capital budget was implemented, leaving more than N14 trillion unspent.
In simple terms, for every N100 budgeted for roads, hospitals, schools, power projects, and other government programmes, only about N18 was actually used.
The situation has raised concerns among economic analysts and financial experts, especially because there is little explanation regarding how the remaining borrowed funds were utilised.
A closer look at the borrowing figures showed that domestic loans accounted for N7.08 trillion, surpassing the budget target by about N640 billion. Meanwhile, multilateral and bilateral loans tied to projects rose sharply to N4.81 trillion, far above the N2.52 trillion target for the period.
Interestingly, no foreign commercial borrowing was recorded, even though the budget had made room for N1.38 trillion under that category.
Overall, deficit financing reached N12.07 trillion within the first three quarters of the year, exceeding the planned N10.58 trillion by over N1.49 trillion.
The Budget Office explained that the government financed the deficit mainly through domestic borrowing, privatisation proceeds, and project-linked foreign loans. During the third quarter alone, financing sources included N970 billion from domestic borrowing, N120.61 billion from privatisation, and N3.13 trillion from multilateral and bilateral loans.
One of the most concerning revelations in the report was the huge gap between borrowing and actual project execution. The N11.89 trillion borrowed was almost four times higher than the N3.10 trillion spent on capital projects.
Further breakdowns showed that Ministries, Departments, and Agencies spent only N1.21 trillion out of a projected N13.90 trillion for capital projects. This represents a shortfall of more than 91 per cent.
However, government-owned enterprises fully utilised their capital allocation of N615.68 billion, while donor-funded and grant-supported projects exceeded expectations with N1.08 trillion spent.
Another major concern was that no spending was recorded under multilateral and bilateral project-tied loans, despite large amounts being borrowed under that category. This suggests that funds secured for specific projects may not yet have been disbursed or implemented.
The Budget Office blamed the poor capital expenditure performance on limited cash availability, the government’s bottom-up cash release process, and shifting priorities.
Analysts say the trend reflects a deeper structural problem in Nigeria’s public finance system, where borrowing continues to rise while execution of development projects remains weak.
With debt servicing already taking up a large portion of government revenue, experts warn that continued borrowing without corresponding infrastructure development could increase pressure on the economy and attract criticism from lawmakers, investors, and international creditors.
