Nigeria’s public debt profile is expected to surge following the N162.025 trillion loan President Bola Ahmed Tinubu has sought the National Assembly’s approval for fresh borrowing’. Accordingly, the president has requested the lawmakers to approve new borrowing plans to a tune of $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.
Considering 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 profile to a record breaking of N162.025 trillion.
Data from the Debt Management Office (DMO) revealed that N56.6 trillion of the country’s current N144.67 trillion debt profiles was borrowed by Tinubu’s administration as his predecessor, Muhammadu Buhari, left it at N87.379 trillion.
The loan request was contained in letters addressed and read to the National Assembly by Senate President Godswill Akpabio and the Speaker of the House of Representatives, Tajudeen Abbas.
According to the letter, the request for the borrowing is expected 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.
While acknowledgeing the damage the removal of subsidy has done to the economy pushing the domestic revenues to nothing, Tinubu emphasized 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 explained the urgency to stabilise the economy, describing it as crucial that require approval of the lawmakers 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 has also seek the lawmakers 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.
According to him, the request is in line with 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.
However, reacting to the government posture, 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”.
A development expert, Joseph Momoh, also 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 concluded.