Nigeria borrowed N11.89 trillion in the first nine months of 2025 but released only N3.10 trillion for capital projects, spending more than four times that amount on debt servicing alone, according to the Budget Office of the Federation (BoF) Third Quarter 2025 Budget Implementation Report.
The figures confirm that capital spending reached just 26 percent of total debt financing receipts during the period. Domestic borrowing accounted for N7.08 trillion of the total, while multilateral and bilateral project-tied loans contributed N4.81 trillion.
Debt servicing consumed N12.63 trillion over the same nine months, outpacing infrastructure and development spending by a ratio of more than four to one. Of the N23.44 trillion budgeted for capital projects across the full 2025 fiscal year, only around 13 percent had been released by the end of September. Ministries, Departments and Agencies (MDAs) received just N1.208 trillion for capital spending, with grants and donor-funded projects accounting for a further N1.08 trillion.
The BoF report attributes the underperformance partly to a bottom-up cash planning system operated by the Office of the Accountant-General, which created bottlenecks in fund disbursement to project-executing agencies. Several ministries also cited delayed release of counterpart contributions as a barrier to accessing donor-supported capital funds.
For economists and fiscal analysts, the pattern raises a fundamental concern: Nigeria is accumulating debt at accelerating pace while the productive returns on that debt remain difficult to locate in infrastructure, service delivery or economic output growth. The country’s debt service to revenue ratio continues to draw scrutiny, as interest payments absorb an increasingly dominant share of federal receipts.
Nigeria’s Senate has already signalled further borrowing ahead, with the 2026 budget projecting a deficit that will require fresh domestic and external financing to close.
