Nigeria’s debt to hit N162trn as president seeks N17trn loans

By Itodo Daniel Sule & Saawua Terzungwe & Philip Shimnom Clement

Nigeria’s public debt profile will rise to N162.025 trillion as President Bola Ahmed Tinubu has sought the National Assembly’s approval for fresh loans’.

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The president requested the legislature to approve new borrowing plans totaling $21.5 billion, along with €2.19 billion, 15 billion Japanese yen and a €65 million grant, as part of the federal government’s 2025–2026 borrowing framework.

Using the current official exchange rate as of May 27, 2025 at N650 to $1; the proposed borrowings of $21 billion (N13.65 trillion), €2.19 billion (N4 trillion), 15 billion Japanese Yen (N174 billion) and €65 million (N116 billion) will amount to N17.355 trillion, pushing the country’s debt burden to N162.025 trillion.

The data from the Debt Management Office (DMO) indicated that N56.6 trillion of the country’s current N144.67 trillion debt profile was borrowed by Tinubu’s administration as his predecessor, Muhammadu Buhari, left it at N87.379 trillion.

The president’s fresh loan request was contained in letters read separately at both chambers of the National Assembly by Senate President Godswill Akpabio and the Speaker of the House of Representatives, Tajudeen Abbas.

He said the request for the external borrowing was to enable the government fund priority projects across infrastructure, agriculture, health, education, water supply, security and employment generation.

“These projects were selected based on technical and economic evaluations and are geared toward addressing the country’s infrastructure deficit, reducing poverty, creating jobs, and boosting food security,” the president stated.

Citing the impact of subsidy removal and dwindling domestic revenues, Tinubu emphasised the urgency of closing the financial gap through prudent external borrowing, noting that the funds would be targeted at sectors such as power, railways and healthcare.

“I want to emphasise that the projects and programmes included in the Borrowing Plan were selected based on thorough technical and economic evaluations as well as their anticipated contribution to the socio-economic development of the country.

“These initiatives aim to generate employment, promote skill acquisition, foster entrepreneurship, reduce poverty, and enhance food security, all of which will improve the livelihoods of the average Nigerian. The majority of these projects and programmes will be implemented across all 36 states and the Federal Capital Territory.”

He said given the urgent need to stabilise the economy, it was crucial to seek the consideration and approval of the National Assembly for the 2025-2026 External Borrowing Plan as it would enable the government to fulfill its obligations to the Nigerian people through timely disbursement and effective project implementation.

In another letter, Tinubu requested the National Assembly’s approval to raise up to $2 billion through the issuance of foreign currency-denominated financial instruments in Nigeria’s domestic debt market.

“This request is pursuant to the provisions of Section 44 (1) and (2) of the Fiscal Responsibility Act 2007 and Section 1(7) of the Executive Order, which requires National Assembly approval for all new borrowings and appropriation of the proceeds,” the president wrote.

He said the proceeds would be invested in critical sectors of the economy to drive growth, infrastructure, job creation, and foreign exchange earnings.

The strategy, according to him, aims to diversify government funding sources, stabilise the naira and deepen the local financial market.

He said it would allow investors have the opportunity to earn reasonable income on their US Dollar funds, while allowing the government to channel the funds to productive uses in the economy.

However, he acknowledged that the capital raising would increase Nigeria’s public debt stock and debt servicing costs.

N758bn bond to clear pension arrears

In a third request, Tinubu asked the legislature to approve the issuance of bonds worth N757.98 billion in the domestic market to offset outstanding pension liabilities under the Contributory Pension Scheme as of December 31, 2023.

The request, he said, followed the federal government’s non-compliance with several provisions of the Pension Reform Act 2014 over the years due to revenue constraints.

“This bond issuance will enable the federal government to meet its obligations to retirees, restore confidence in the pension system, and improve the welfare of retired public servants,” Tinubu wrote.

It’s fiscal irresponsibility – Experts

Reacting to the fresh loans’ request, the Executive Director at the Centre for Fiscal Transparency and Public Integrity, Umar Yakubu, alleged that it would only fund over bloated governance structure.

“We’ve reached a level of fiscal irresponsibility where we finance government excesses with borrowing because overtime, statistics has shown that these borrowings have little or no impact on the common man,” he told Daily Trust.

A development expert, Joseph Momoh, said continuous borrowing by the current administration might further deepen poverty rather than fast track development.

“If you look at the indices, nothing serious had changed. Look at cost of living, insecurity and poverty, it is on the rise and they keep borrowing without results,” he said.

A professor of Capital Market Studies at the Nasarawa State University, Keffi, Uche Uwaleke, said: “Loan is in order if tied to specific projects with high positive impact on the economy. In order to ensure this, the loan proceeds should be ring-fenced and its utilization subjected to strict monitoring by not only government agencies but also by civil society groups and the media.”

Under Tinubu’s administration, Nigeria’s public debt has jumped from N87.379 trillion as of June 2023 (one month after Buhari’s exit from power) to N142.319 trillion as of September 2024, an increase of N56.6 trillion.

Checks by Daily Trust showed that Nigeria’s total public debt rose to N144.67 trillion ($94.23 billion) as of December 31, 2024, representing a 48.58 per cent increase compared to N97.34 trillion ($108.23 billion) recorded at the end of December 2023.

The DMO disclosed this in its latest report on the country’s public debt profile.

The report also revealed a quarter-on-quarter rise of 1.65 per cent from the N142.32 trillion ($88.89 billion) recorded at the end of September 2024, highlighting the continuous increase in the nation’s debt burden during the final quarter of the year.

An analysis of Nigeria’s public debt on a year-on-year basis showed an increase of N47.32 trillion, representing a 48.58 per cent rise from December 2023 to December 2024.

Nigeria’s external debt increased by 83.89 per cent from N38.22 trillion ($42.50 billion) in December 2023 to N70.29 trillion ($45.78 billion) in December 2024.

The rise was attributed to new external borrowings and the impact of naira depreciation, which raised the naira equivalent of dollar-denominated debt.

External debts rose by N1.4 trillion, moving from N68.89 trillion ($43.03 billion) as of September 2024 to N70.29 trillion ($45.78 billion) in December.

This was influenced by new foreign loans acquired in the last three months of the year, alongside the further weakening of the naira.

External debts account for 48% of total public debt

As of December 2024, external debts made up of 48.59 per cent of Nigeria’s total public debt; and domestic debts, 51.41 per cent.

A breakdown of external debts showed that the federal government accounted for N62.92 trillion ($40.98bn); while states and the Federal Capital Territory held N7.37 trillion ($4.80 billion).

The rise in public debts has raised concerns among economic analysts regarding Nigeria’s fiscal stability.

The sharp increase, particularly in external debts, highlights the nation’s vulnerability to exchange rate fluctuations and changes in global economic conditions.

With the continued depreciation of the naira, the cost of servicing foreign debt could escalate, adding pressure on the country’s financial resources.

Further checks by Daily Trust showed that out of the N54.2 trillion budget passed by the National Assembly for 2025, N14.3 trillion was earmarked for debt servicing.

The budget also had a fiscal deficit of N13.08 trillion.