Nigeria’s public debt could rise dramatically as President Bola Tinubu seeks legislative approval for new external loans estimated at $24.14 billion. The proposed borrowing, part of the 2025–2026 external financing plan, is intended to support infrastructure and key development sectors, but it has sparked widespread concern among economic experts and opposition figures.
At the current official exchange rate of ₦1,583.74 to the dollar, the fresh loan translates to around ₦38.24 trillion. This would swell the nation’s debt stock from ₦144.67 trillion at the end of 2024 to nearly ₦183 trillion by 2026, if fully approved.
The loan breakdown includes $21.54bn, €2.19bn (approximately $2.5bn), and ¥15bn (around $102m), according to current currency conversions. This significant new debt comes on the heels of a rapid rise in both domestic and external obligations over the past year, driven largely by exchange rate pressures and expanding fiscal needs.
Economic analysts have raised red flags about the sustainability of the country’s debt trajectory. Johnson Chukwu, CEO of Cowry Asset Management, emphasized that the crux of the matter lies in how the borrowed funds will be used. “The issue isn’t the borrowing itself, but whether the funds will be spent on projects that generate long-term value,” he said.
Chukwu warned that the government’s past record of opaque and inefficient spending increases the risk of the loan becoming another financial burden. He urged policymakers to engage the private sector in capital projects to ensure value for money.
Muda Yusuf, head of the Centre for the Promotion of Private Enterprise, echoed similar sentiments. He cautioned that Nigeria’s debt servicing already exceeds its capital expenditure and could undermine essential public services. “We need more emphasis on revenue generation and fiscal discipline, not continuous borrowing,” he stated.
In addition to the $24bn loan request, President Tinubu is also seeking parliamentary approval for a $2bn foreign currency bond to be issued domestically. According to the presidency, the move is aimed at boosting dollar liquidity in the local financial system and helping stabilize the exchange rate.
Furthermore, a ₦758bn bond issuance is being proposed to clear arrears under the Contributory Pension Scheme. This initiative, approved earlier by the Federal Executive Council, is seen as a step toward easing hardship for retirees and restoring confidence in the pension system.
The opposition Peoples Democratic Party (PDP) and former Vice President Atiku Abubakar have strongly criticized the new loan request. PDP spokesperson Debo Ologunagba described the move as reckless and demanded full disclosure on how past loans were utilized.
Atiku, speaking through his media aide Paul Ibe, questioned the rationale for piling on more debt without tangible outcomes from previous borrowings. “This government appears more focused on accumulating loans than delivering results,” he remarked.
Critics have also taken aim at the National Assembly for what they perceive as its unwillingness to challenge the executive. Civil society leaders, including Auwal Rafsanjani of CISLAC and Debo Adeniran of CACOL, have called for increased scrutiny and fiscal transparency.
Experts like Prof. Segun Ajibola of Babcock University and Marcel Okeke, a former Zenith Bank chief economist, warned that Nigeria’s debt dynamics are becoming untenable. They stressed that borrowing should only be considered if it supports growth and development — and not just to fill budget gaps.
“There’s a real risk that these new obligations will saddle future generations with debt, without fixing the root causes of our economic challenges,” Okeke said.
With additional loans on the horizon and limited improvement in revenue collection, Nigeria’s fiscal space continues to tighten. While the presidency argues that the loans are essential to bridge development deficits, many observers insist that only transparency, efficiency, and prudent management can justify such massive borrowing.
