The Federal Government ran a fiscal deficit of ₦4.69 trillion in the first quarter of 2026. The Budget Office of the Federation released the figure. Revenue was ₦5.08 trillion against a quarterly target of ₦9.22 trillion. Total spending was ₦9.76 trillion against ₦17.08 trillion projected. The numbers confirm a familiar pattern. The government is collecting less than it planned and spending less than it budgeted, while debt consumes the difference.
Nigeria has financed deficits through borrowing since the 2016 recession. The 2023 subsidy removal and naira float were meant to widen the fiscal space. They raised prices and squeezed household demand. Revenue improved but not enough. Debt service has grown faster than revenue. In 2024 and 2025, the government spent more on interest than on capital projects in some quarters. The current data extends that trend.
Debt service took ₦4.63 trillion, about 91 per cent of revenue. Domestic debt service was ₦3.14 trillion. External debt service was ₦1.49 trillion. Capital spending was ₦1.69 trillion against a prorated target of ₦8.07 trillion. Personnel costs were ₦1.96 trillion. Domestic borrowing was ₦3.9 trillion against a prorated target of ₦4.61 trillion. Foreign borrowing was projected at ₦2.70 trillion, but no inflow was recorded. That gap matters. The budget assumed external financing that has not arrived.
The composition of spending tells the story. Salaries and interest consumed most of the revenue. Roads, power and health infrastructure received a fraction of what was planned. Contractors wait for payments. Projects stall. The deficit is being financed domestically, which puts pressure on bank credit and interest rates.
The fiscal arithmetic is unsustainable if it persists. Revenue must rise. Debt service must fall. Capital spending must recover. None of these happens automatically. The government needs tax reform to deliver, not just pass. It needs to refinance expensive debt. It needs to execute projects so that borrowing produces growth.
Winners: Domestic bondholders, who receive interest. Banks, which earn on government securities. Lenders, who face limited default risk. Losers: Contractors, whose capital projects are unfunded. Patients and students, who wait for infrastructure. Taxpayers, who service the debt. Future generations, who inherit it. The economy, which loses productivity.
Bottom Line: A ₦4.69 trillion deficit. Debt service at 91 per cent of revenue. Capital spending at a fifth of target. The government is paying its bills and building little. Revenue must rise or the debt will keep eating the budget.