By Uche Usim
The federal government borrowed N11.89 trillion in the first nine months of 2025 but spent just N3.10 trillion on capital projects.
This exposed a widening gap between debt accumulation and infrastructure delivery.
Data from the 2025 third-quarter Budget Implementation Report released by the Budget Office of the Federation show that the loans comprised N7.08 trillion in domestic borrowing and N4.81 trillion in multilateral and bilateral project-tied facilities. No foreign borrowing was recorded during the period, despite a budget provision of N1.38 trillion for external loans.
The figures indicate that actual borrowing exceeded the N10.34 trillion projected for the first three quarters by N1.54 trillion, representing an increase of 14.91 per cent. Similarly, total deficit-financing items rose to N12.07 trillion, above the N10.58 trillion budgeted by N1.49 trillion, or 14.12 per cent.
Domestic borrowing alone climbed to N7.08 trillion, surpassing its N6.44 trillion target by N639.89 billion, while multilateral and bilateral project-tied loans surged to N4.81 trillion—far above the N2.52 trillion projection, 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,” noting that available funding sources in the quarter included N970 billion in domestic borrowing, N120.61 billion from privatisation proceeds, and N3.13 trillion from multilateral and bilateral loans.
Despite the strong inflow of borrowed funds, capital expenditure performance remained weak. Total capital spending stood at N3.10 trillion, representing just 17.66 per cent of the N17.58 trillion budgeted for the period, leaving a shortfall of N14.48 trillion. This implies that only about N17.66 out of every N100 earmarked for capital projects was actually spent.
Spending by Ministries, Departments and Agencies was particularly low, with N1.21 trillion utilised out of a N13.90 trillion target, a shortfall of N12.69 trillion or 91.31 per cent.
Government-owned enterprises met their target with N615.68 billion, while grants and donor-funded projects outperformed expectations at N1.08 trillion compared to N541.43 billion projected.
However, no spending was recorded under the capital expenditure category tied to multilateral and bilateral loans, despite a provision of N2.52 trillion, further underscoring inefficiencies in project execution.
Overall, the data reveal a stark mismatch between borrowing and actual project delivery, with total loans standing at nearly four times capital expenditure. In effect, capital spending accounted for just 26.13 per cent of total borrowings within the period.
The Budget Office attributed the slow pace of capital releases to the bottom-up cash release process, limited resource availability, and shifting government priorities, adding that N780.28 billion was released to MDAs for capital projects in the third quarter.
The development comes amid growing concerns over Nigeria’s rising debt profile, especially as the government plans to increase borrowing to N29.20 trillion in 2026, up from an earlier projection of N17.89 trillion. Former Anambra State governor and Labour Party presidential candidate, Peter Obi, has previously criticised the borrowing strategy, arguing that it is not translating into meaningful economic growth or improved living standards for Nigerians.
Leave a comment