FG Plans N17.89tn New Loans to Finance 2026 Budget
The Federal Government is pushing to secure N17.89 trillion in new loans to finance the 2026 budget, a move necessitated by a widening fiscal deficit and revenue shortfalls.
According to the 2026 Abridged Budget Call Circular released by the Federal Ministry of Budget and Economic Planning, the proposed borrowing figure represents a sharp 72 percent increase from the N10.42 trillion approved for the 2025 fiscal year.
This revelation comes as part of the 2026–2028 Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP), which was recently approved by the Federal Executive Council (FEC).
The document projects a total aggregate expenditure of N54.43 trillion for 2026, with a budget deficit estimated at N20.10 trillion, representing about 3.61 percent of the country’s Gross Domestic Product (GDP).
Of the total spending plan, a significant portion—N15.91 trillion—is allocated for debt servicing, which is nearly 30 percent of the entire budget.
Speaking on the fiscal outlook, the Minister of Budget and Economic Planning, Atiku Bagudu, explained that the government opted for conservative benchmarks to ensure budget realism.
“However, so that we don’t run into revenue problems, we use a benchmark oil production figure of 1.8 [mbpd] for budget purposes,” Bagudu stated, despite an ambitious production target of 2.06 million barrels per day.
The minister further clarified the oil price benchmark, noting: “Even the oil benchmark of $64.85 which is being used this year, is lower than the average selling price of Nigeria’s crude oil… But for an abundance of caution, we are using $64.85”.
The borrowing plan has sparked concerns among economic experts about Nigeria’s rising debt profile. The proposed N17.89 trillion loan for 2026 is significantly higher than previous years, raising questions about debt sustainability as debt service costs continue to consume a large chunk of government revenue.
Other key assumptions in the 2026 fiscal framework include an exchange rate of N1,512 to the dollar and a GDP growth rate of 4.68 percent.
The MTEF/FSP has been transmitted to the National Assembly for consideration and approval, setting the stage for the presentation of the 2026 Appropriation Bill.
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