Nigeria’s public debt is on track for a dramatic escalation as President Bola Tinubu seeks the National Assembly’s approval for fresh external borrowing amounting to $24.14 billion—raising fears of a debt burden spiraling out of control.
At the official exchange rate of ₦1,583.74/$1, the proposed loans could balloon Nigeria’s total public debt by ₦38.24 trillion, pushing the debt stock from ₦144.67 trillion at the end of 2024 to an estimated ₦182.91 trillion by 2026.
The proposed borrowing plan includes $21.54 billion, €2.19 billion (about $2.5 billion), and ¥15 billion (about $102 million), making up a total of approximately $24.14 billion. If approved, this would raise Nigeria’s external debt by over 52 percent—from $45.78 billion to $69.92 billion—and increase its naira equivalent external debt to more than ₦108 trillion.
The development comes amid rising concerns over the sustainability of Nigeria’s debt load, which surged by 48.58 percent in 2024 alone, fueled by increased borrowing and currency devaluation.
According to data from the Debt Management Office, Nigeria’s total debt jumped from ₦97.34 trillion in 2023 to ₦144.67 trillion by the end of 2024. External debt surged by 83.89 percent due to naira depreciation, while domestic debt rose 25.77 percent. The Federal Government accounted for ₦70.41 trillion, with states and the FCT contributing ₦3.97 trillion.
If Tinubu’s loan plan proceeds, the federal debt alone would rise by over 28 percent, further straining an already fragile fiscal position.
President Tinubu, in a letter to the House of Representatives, defended the borrowing as part of a 2025–2026 rolling plan aimed at revitalizing critical sectors like infrastructure, agriculture, health, education, water resources, security, and public finance reforms. He said the projects were rigorously appraised for economic viability.
But this reassurance has not silenced critics—or calmed fears.
Alongside the $24.14 billion external loan, Tinubu is also seeking approval for a $2 billion foreign currency-denominated bond to be issued in the local market under a 2023 Executive Order. The aim, according to the Presidency, is to attract domestic dollar investment and stabilise the forex market. However, it will add further strain on debt servicing since repayments must be made in foreign currency.
Additionally, Tinubu requested the issuance of ₦757.98 billion in bonds to clear outstanding pension liabilities, drawing mixed reactions from stakeholders. While welcomed by pension advocates, it adds to the total debt load.
Taken together, the three measures would push Nigeria’s debt well past ₦182.91 trillion, excluding domestic borrowing yet to be incurred for budget deficits or scheduled repayments such as the $1.118 billion Eurobond due in November 2025.
Johnson Chukwu, CEO of Cowry Assets Management, stressed that “the issue is not the size of the loan, but how it is deployed.” He warned that unless the funds generate value above their cost, they risk deepening Nigeria’s economic woes.
Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, cautioned that debt servicing is already outpacing capital investment. “This trend could crowd out essential governance functions,” he said, urging the government to shift focus to revenue growth and fiscal consolidation.
Former Zenith Bank chief economist Marcel Okeke condemned the loan strategy as a return to economic mismanagement, while Professor Segun Ajibola of Babcock University supported the pension bond, calling it long overdue for retirees battling inflation.
The political opposition has been quick to condemn the move.
The Peoples Democratic Party (PDP) and former Vice President Atiku Abubakar have decried the borrowing request as reckless and opaque. PDP spokesperson Debo Ologunagba accused the Tinubu administration of irresponsible leadership and demanded a full audit of previous loans.
“This is not governance. This is mortgaging the future,” Atiku said through his media aide Paul Ibe. “Where is the evidence that previous borrowings improved the economy?”
Auwal Rafsanjani of the Civil Society Legislative Advocacy Centre criticised the government for failing to account for earlier loans, including a $3.4 billion IMF facility from the COVID-19 era.
Debo Adeniran of the Centre for Accountability and Open Leadership said Nigeria has enough resources to avoid borrowing, unless strictly justified by the 2025 budget.
Human Rights Writers Association leader Emmanuel Onwubiko condemned the move as “reckless and harmful to the future,” blaming the National Assembly for enabling excessive borrowing.
BudgIT’s Head of Research, Vahyala Kwaga, warned the loan package could push Nigeria past its 40 percent debt-to-GDP ceiling. “There’s a worrying lack of transparency,” he said, noting that the latest budget implementation report only covers Q2 2024.
