Nigeria’s total public debt is on track to surpass N180 trillion, following President Bola Tinubu’s fresh request to the National Assembly for approval of new external and domestic loans totaling N34.15 trillion.
In separate letters to the Senate and House of Representatives, read during plenary by Senate President Godswill Akpabio and Speaker Tajudeen Abbas, the President is seeking approval for a new external borrowing plan of over $21.5 billion equivalent to N33.39 trillion at the official exchange rate of N1,590 per dollarand a domestic bond issuance of N757.9 billion to clear outstanding pension liabilities.
Tinubu emphasized the importance of the 2025–2026 borrowing plan, stating that the funds would target key economic sectors such as infrastructure, agriculture, health, education, water supply, employment, and financial reforms. He added that the funds would help bridge Nigeria’s infrastructure gap and address funding shortfalls following the removal of fuel subsidies.
According to Tinubu, the external borrowing package includes:
- $21.54 billion
- €2.19 billion
- ¥15 billion
- A grant of €65 million
He assured lawmakers that the funds would support critical infrastructure projects across all 36 states and the Federal Capital Territory (FCT), aiming to boost job creation, entrepreneurship, food security, and national development.
In a separate request, the President sought approval for the issuance of domestic bonds to settle pension arrears totaling N757.98 billion under the Contributory Pension Scheme (CPS). He cited revenue shortfalls as the reason for the federal government’s inability to meet statutory pension contributions under the Pension Reform Act 2014, resulting in accumulated arrears and hardship for retirees.
Tinubu said the bond proposal had already received the nod of the Federal Executive Council (FEC) at its meeting on February 4, 2025, noting that the move would improve retirees’ welfare and inject liquidity into the economy.
Both requests were referred to relevant committees in the Senate and House for further legislative action.
Debt Situation Worsens
Nigeria’s public debt surged by 48.6% in 2024, rising to N144.66 trillion from N97.34 trillion in 2023. The Federal Government alone accounts for N137.28 trillion, or 95% of the total. With the new borrowing plans and existing domestic borrowing of N10.85 trillion in the first four months of 2025, the total public debt is projected to cross N180 trillion.
Debt Service Burden Deepens
The Federal Government’s debt service-to-revenue ratio climbed to 131% in the first two months of 2025, up from 118% in the same period in 2024, according to data from the Central Bank of Nigeria (CBN). The government spent N1.4 trillion on debt service during the period, a 25% year-on-year increase.
Meanwhile, revenue rose by 13% to N1.067 trillion, from N943.4 billion in the same period in 2024, highlighting a deepening fiscal strain.
Analysts Caution on Rising Debt
Tunde Abidoye, Head of Equity Research at FBNQuest Merchant Bank, warned that the new loan request almost half of Nigeria’s current external debt of $45.8 billionposes risks to debt servicing and fiscal stability.
Former Chartered Institute of Stockbrokers (CIS) President, Olatunde Amolegbe, noted that while borrowing is necessary to plug the budget deficit, repayment capacity and transparent fund utilization are critical.
Economic analyst Clifford Egbomeade said the borrowing plan could have long-term benefits if the funds are efficiently applied to productive sectors like agriculture and infrastructure. However, he stressed that Nigeria’s already high debt burden means that careful planning and accountability will be essential to avoid worsening the fiscal crisis.
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