Nigeria’s public debt is projected to exceed N180 trillion following President Bola Tinubu’s request to the National Assembly for approval of N34.15 trillion in additional external and domestic loans, as reported on May 1, 2025. The borrowing plan includes $21.5 billion (N33.39 trillion at N1,590 per dollar) in external loans, comprising USD 21,543,647,912, EUR 2,193,856,324.54, 15 billion Japanese Yen, and a EUR 65 million grant, plus a N757.9 billion domestic bond issuance to settle pension liabilities under the Contributory Pension Scheme (CPS). Tinubu emphasized that the 2025–2026 borrowing plan targets critical sectors, including infrastructure (railways, power), agriculture, health, education, water supply, security, employment generation, and financial reforms, to address the infrastructure deficit and economic challenges exacerbated by the 2023 fuel subsidy removal.
The external loans, primarily from concessional sources like the World Bank, African Development Bank, and China EximBank, aim to fund projects across all 36 states and the FCT, promoting job creation, poverty reduction, and food security. The N757.9 billion bond, approved by the Federal Executive Council on February 4, 2025, addresses pension arrears accrued due to revenue constraints, aiming to improve retirees’ welfare and inject liquidity into the economy, per the Pension Reform Act 2014. However, Nigeria’s debt, which rose 48.6% to N144.66 trillion ($94.23 billion) by December 2024, faces a deteriorating debt service-to-revenue ratio of 131% in January–February 2025, up from 118% in 2024, with debt servicing costs reaching N1.399 trillion, a 25% year-on-year increase.
Economic analysts express mixed views. Tunde Abidoye of FBNQuest Merchant Bank cautioned against the loan’s scale, nearly half of Nigeria’s $45.8 billion external debt, highlighting exchange rate risks and fiscal space constraints. Olatunde Amolegbe, former CIS President, supported borrowing if repayment capacity is assured, noting the pension bond’s immediate relief for retirees. Clifford Egbomeade emphasized that success hinges on tying loans to productive sectors and reforms to boost revenue, warning that Nigeria’s high debt servicing costs could deepen fiscal strain without transparency. Critics, including the Centre for Fiscal Transparency’s Umar Yakubu, argue that borrowings often fund bloated governance rather than impactful projects, urging a national project audit for accountability. The Senate and House referred the requests to their respective committees for further action, amid projections that the debt could hit N187.79 trillion by year-end.
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