Nigeria’ll continue borrowing to fund N25.91trn budget deficit — Senate

By Henry Umoru

ABUJA—DESPITE complaints from Nigerians over the country’s over-borrowing, the Senate said yesterday the nation would continue to borrow to bridge its massive budget deficit.

It also vowed to end the long-standing practice of rolling over unimplemented budgets, warning Ministries, Departments and Agencies, MDAs, to brace up for stricter scrutiny.

The Senate equally declared that the National Assembly would no longer approve extension of budget implementation cycles, emphasising that strict timelines, stronger oversight and improved fiscal discipline would guide the execution of the 2026 Appropriation Act.

Speaking at a public hearing on “The 2026 Appropriation Bill” organised by the Senate Committee on Appropriations, the Chairman of the committee, Senator Olamilekan Adeola, APC, Ogun West, noted that borrowing had become unavoidable, given the country’s revenue constraints and huge development needs. He said: “Never again will the National Assembly approve budget extensions. We must discipline our budgeting cycle, enforce strict adherence to appropriation timelines and ensure better coordination between policy design and implementation.”

Adeola, who noted though public opposition to borrowing had continued, Nigeria’s infrastructure gap and development challenges left the government with little choice, stressing that the real issue was not borrowing itself, but how deficits were financed.

“Nigeria cannot help but keep borrowing because revenue inflows are unpredictable and development needs are enormous. What matters is how we borrow and how we fund our deficits,’’ he said.

He said Nigeria must honour its obligations to protect its credit rating and international standing, adding that to avoid crowding out private sector credit, government was deliberately limiting domestic borrowing and exploring alternatives such as asset optimisation, privatisation, Public-Private Partnerships, PPPs, joint venture asset leveraging and Eurobond issuances.

“Government is deliberately avoiding excessive domestic borrowing that could crowd out private sector credit. Instead, we are exploring external financing, asset sales and privatisation to bridge revenue gaps,’’ he said.

On the 2026 budget, estimated at ¦ 58.47 trillion, Adeola described it as a “Budget of Consolidation,” anchored on subsidy removal, tax reforms, public finance restructuring and electricity sector reforms. He warned that the success of the budget would depend on effective implementation and people-centred outcomes. The lawmaker disclosed that projected revenue stood at N33.19 trillion, leaving a deficit of about N 25.27 trillion.

According to him, debt servicing is estimated at N15.90 trillion, while capital expenditure of N23.21 trillion reflects government’s focus on infrastructure and productivity.

Adeola warned heads of MDAs to take budget defence seriously, noting that failure to justify proposals could lead to reallocations.

He also reaffirmed that all government funds, including service-wide votes, remained subject to legislative oversight.

On his part, an Economist and fiscal policy expert, Dr. Olatilewa Adebanjo who warned that Nigeria’s rising budget deficit could become unsustainable without urgent reforms in revenue mobilisation and fiscal discipline, however called for a comprehensive review and stricter enforcement of the Fiscal Responsibility Act, FRA, describing it as a potent but underutilised law.

He said: “We need to remain alert and proactive. All stakeholders must closely monitor critical sectors to ensure revenues meant for government actually reach government coffers.”

The economist, who raised concerns about the mining and solid minerals sector, alleging massive revenue leakages, accused foreign interests, especially Chinese firms, of extracting Nigeria’s resources with minimal benefit to the country.

“What we continue to see is a situation where foreign actors, especially Chinese interests, come into the country, extract our mineral resources and leave with enormous value, while Nigeria earns little or nothing in return. This is a wake-up call,’’ he added.

Adebanjo also criticised what he described as unrealistic revenue projections, urging government to base budgets on achievable figures and hold revenue-generating agencies accountable for performance.

In his remarks, the Accountant-General of the Federation, AGF, Shamseldeen Ogunjimi, took a swipe at the country’s budgeting system, saying for too long, Nigeria had been strong on budget formulation but weak on translation.
Ogunjimi said that “budget is not a spreadsheet; it is not a ritual of numbers; it is not merely an annual legal requirement.

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