Nigeria’s Public Debt May Soar to N183tn as Tinubu Seeks $24bn in Fresh Foreign Loans

 

Nigeria’s public debt is projected to exceed N182.91tn following a fresh loan request by President Bola Tinubu. The President has asked the National Assembly to approve new external borrowings totaling approximately $24.14bn.

At the official exchange rate of N1,583.74/$1, the new loans could add N38.24tn to the current debt stock of N144.67tn recorded at the end of 2024, potentially pushing total public debt to over N182.91tn by 2026.

The proposed borrowing consists of $21.54bn, €2.19bn, and ¥15bn. When converted using current exchange rates—€1 to $1.1381 and ¥1 to $0.0068—the euro portion equals about $2.5bn, and the yen about $102m. In total, the borrowing request sums up to $24.14bn, with a naira equivalent of N38.24tn.

According to the Debt Management Office, Nigeria’s debt rose sharply from N97.34tn in 2023 to N144.67tn in 2024—an increase of 48.58%. This spike was driven by significant domestic and foreign borrowing, compounded by the naira’s depreciation. External debt rose from N38.22tn ($42.5bn) to N70.29tn ($45.78bn)—an 83.89% increase. Domestic debt also climbed by 25.77%, from N59.12tn to N74.38tn.

Of this, the Federal Government accounted for N70.41tn (up from N53.26tn), while state and FCT debt declined to N3.97tn from N5.86tn, reflecting a more cautious borrowing stance by subnationals.

If the full borrowing is approved, Nigeria’s external debt could rise by 52.7% to $69.92bn, or over N108tn in naira terms. This would push the Federal Government’s total debt—currently N133.33tn—to more than N171.57tn, marking a 28.68% increase. Compared to the national debt of N144.67tn, this represents a 26.43% jump.

In his letter to the House of Representatives, President Tinubu stated that the loans form part of the 2025–2026 borrowing plan aimed at financing key sectors such as infrastructure, agriculture, health, education, water, security, and fiscal reforms. The projects, he noted, have undergone technical and economic evaluations and are expected to boost economic growth and service delivery.

Separately, Tinubu requested approval for a $2bn foreign currency-denominated bond to be issued within Nigeria’s domestic market. The initiative, under the 2023 Presidential Executive Order, aims to deepen local capital markets, attract dollar investments, and stabilize the exchange rate. However, the bond will add to the country’s foreign debt burden.

Additionally, the President is seeking approval to issue N757.98bn in bonds to clear outstanding pension liabilities under the Contributory Pension Scheme as of December 2023. This initiative, endorsed by the Federal Executive Council, aligns with the Pension Reform Act 2014 and is intended to alleviate retirees’ hardships and restore trust in the pension system.

Collectively, the proposed $24.14bn loan, $2bn bond, and N758bn pension bond could raise Nigeria’s total debt beyond N182.91tn. This does not include additional domestic borrowings likely in 2025–2026 or repayments such as a $1.118bn Eurobond due in November 2025. Although Nigeria has repaid the $3.4bn IMF loan obtained in 2020, it still incurs annual charges of about $30m in Special Drawing Rights.

Economists Voice Concern

Experts have raised alarms over the proposed borrowing, emphasizing the need for transparency and efficient deployment of the funds. Johnson Chukwu, CEO of Cowry Assets Management, said the critical issue is how the loans are used. He argued that loans are justifiable if invested in value-generating assets but warned against wasteful spending.

Chukwu also recommended public-private partnerships to reduce infrastructure costs and ensure better project outcomes.

Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, highlighted the unsustainable growth in debt servicing, now outpacing capital expenditure. He warned that continued borrowing could jeopardize essential government functions and urged a focus on revenue growth and fiscal reform.

Prof. Segun Ajibola of Babcock University supported the proposed N758bn pension bond, describing it as overdue relief for retirees facing inflation and economic hardship. However, he cautioned against deficit financing through central bank interventions.

Former Zenith Bank Chief Economist, Marcel Okeke, criticized the loan request as regressive. He argued that successive governments have consistently borrowed without delivering tangible development.

Political Backlash

The Peoples Democratic Party (PDP) and former Vice President Atiku Abubakar have condemned the loan request, branding it irresponsible. PDP spokesman Debo Ologunagba called for full disclosure on previous borrowings and accused the APC-led government of prioritizing self-interest over public welfare. He warned that the National Assembly’s rubber-stamp approval process undermines democratic checks and balances.

Atiku Abubakar, via his media adviser Paul Ibe, expressed concern over the lack of transparency and the growing debt burden. He questioned the efficacy of previous loans and warned that without accountability, the new funds could be misappropriated.

Debo Adeniran, Chairman of the Centre for Accountability and Open Leadership, argued that Nigeria has enough resources to fund its needs without recurring to borrowing. He said the loans might only be justified if they align with the 2025 budget.

Auwal Musa Rafsanjani, Executive Director of CISLAC, criticized the government for borrowing without producing measurable results. He cited the unaccounted $3.4bn IMF loan as an example.

Emmanuel Onwubiko of the Human Rights Writers Association described the loan request as reckless and warned that the National Assembly’s lack of independence was enabling financial recklessness.

BudgIT’s Group Head of Research, Vahyala Kwaga, cautioned that the proposed loans could push Nigeria’s debt-to-GDP ratio to its self-imposed ceiling of 40%. He also criticized the lack of updated budget implementation reports and called for increased transparency in how previous loans have been used.

ADEOLA KUNLE