Lucky Obukohwo, Reporting
The federal government borrowed N11.89 trillion in the first nine months of 2025 but spent just N3.10 trillion on capital projects.
This highlighted a growing disconnect between rising debt levels and actual infrastructure development.
According to the 2025 third-quarter Budget Implementation Report published by the Budget Office of the Federation, the borrowings consisted of N7.08 trillion raised domestically and N4.81 trillion obtained through multilateral and bilateral project-linked facilities. Despite a budgeted provision of N1.38 trillion for external loans, no foreign borrowing was recorded within the period.
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 stated that the third-quarter deficit was financed through domestic borrowing and privatisation proceeds. It added that funding sources available during the quarter included N970 billion from domestic borrowing, N120.61 billion realised 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 has heightened concerns over Nigeria’s growing debt burden, particularly as the Federal Government plans to raise borrowing to N29.20 trillion in 2026, compared to the earlier estimate of N17.89 trillion.
Former Anambra State governor and Labour Party presidential candidate, has repeatedly criticised the borrowing approach, saying it has failed to deliver significant economic growth or improve the welfare of Nigerians.