Market News

•Represents 7.4% YoY increase from Q1’25 •Analysts cite revenue gaps, fiscal indiscipline  •Urge FG to cut waste, boost revenue  •Rising debt crippling ability to fund infrastructure – World Bank“

By Babajide Komolafe, Economy Editor & Peter Egwuatu, Assistant Business Editor

At the backdrop of rising public debt pressure and concerns over the  impact on the economy, the Federal Government (FG) increased its domestic borrowing by N8.1 trillion in  the first quarter of 2026 (Q1’26), showing a 7.4 per cent rise from  N7.5 trillion in the same period of 2025.

This upward trend, according to analysts, shows revenue gaps and spending indiscipline, urging the government to double down on revenue collection, cut waste and curb corruption.

Meanwhile, the World Bank has warned that the rising amount of money the Federal Government is spending to service debt is reducing its ability to fund critical infrastructure, citing the sharp decline in capital spending to 1.0 percent of GDP from 1.3 percent of GDP in 2024.

Data obtained by Financial Vanguard from the Central Bank of Nigeria, CBN, and the Debt Management Office, DMO, shows that the 7.4 per cent, year-on-year, YoY, increase in FG’s domestic borrowing in Q1’26 was driven by 63 per cent and 24 per cent YoY increase in borrowing through FGN Bonds and FGN Savings Bonds, respectively, which offset 12 per cent decline in borrowing through Treasury Bills.

FG borrowed N4.86 trillion through Treasury Bills in Q1’26, representing a 12 per cent YoY decline from N5.54 trillion in Q1’25.

However, borrowing from the monthly FGN Bond auctions rose by 63 per cent YoY to N3.182 trillion in Q1 ’26 from N1.953 trillion in Q1’25.

Similarly, borrowing through the FGN Savings Bond rose by 24 per cent YoY to N16 billion in Q1’26 from N13 billion in Q1’25.