Nigeria's Fiscal Deficit to Reach N25.7tn by 2026

According to a report by CardinalStone, Nigeria's fiscal deficit is expected to widen to N25.7 trillion, which is 4.9% of the Gross Domestic Product (GDP) by the end of 2026. This widening deficit is attributed to government spending continuing to outpace revenue growth, despite ongoing fiscal reforms.

The report estimates that government expenditure will reach N63.0 trillion, while the fiscal deficit will be financed through domestic borrowing, which has already amounted to N8.6 trillion in local market bonds. Additionally, the government is increasingly turning to external debt financing, with sources including a proposed $5 billion total return swap program and loans from various international banks.

The total public debt is projected to rise to N184.9 trillion, equivalent to 35.5% of GDP by 2026, which is a decrease from 36.9% in 2025. The report also notes improvements in government revenue due to fiscal reforms implemented in 2023, which have led to increased tax revenue.