Nigeria’s total public debt is set to surpass ₦180 trillion if the National Assembly approves President Bola Ahmed Tinubu’s fresh loan requests worth ₦34.15 trillion.
In two separate letters read during plenary by Senate President Godswill Akpabio and House Speaker Tajudeen Abbas, President Tinubu proposed borrowing $21.5 billion externally about ₦33.39 trillion at the official exchange rate of ₦1,590 per dollar.
He also seeks approval for ₦757.9 billion in domestic bonds to clear outstanding pension liabilities under the Contributory Pension Scheme (CPS).
Tinubu explained that the borrowing is aimed at supporting infrastructure, agriculture, education, health, water supply, job creation, and broader economic and financial reforms.
“The 2025-2026 borrowing plan covers all sectors,” he said, “with specific emphasis on growth, employment generation, and poverty reduction.”
According to the President, the removal of fuel subsidy and ongoing revenue shortfalls have made borrowing a necessary move to bridge Nigeria’s wide infrastructure gap.
“In light of the significant infrastructure deficit and declining resources, prudent economic borrowing is essential to close the financial shortfall,” Tinubu wrote.
Tinubu also revealed that the federal government had struggled to meet its pension obligations due to past revenue challenges. This has caused hardship for retirees under the Pension Reform Act of 2014.
“The Federal Government has not fully complied with the PRA 2014, leading to growing pension arrears and suffering for retirees,” Tinubu said.
He assured that issuing bonds would help settle the backlog and restore retirees’ confidence, stating:
“This move will enable retirees to meet their basic needs, improve health, and avoid untimely death.”
Debt Already Soaring
The new borrowing request comes on top of ₦10.85 trillion already borrowed domestically between January and April 2025.
Nigeria’s public debt jumped by 49% from ₦97.34 trillion in 2023 to ₦144.66 trillion at the end of 2024.
One major concern is the country’s worsening debt service-to-revenue ratio, which hit 131% in the first two months of 2025, up from 118% in the same period in 2024.
Data shows the government spent ₦1.399 trillion on debt servicing while earning just ₦1.067 trillion in revenue between January and February 2025.
Experts have expressed mixed reactions. Tunde Abidoye, Head of Equity Research at FBNQuest, warned:
“Some caution is needed, given the rising debt service cost and risks tied to foreign loans. This could shrink Nigeria’s fiscal space.”
Olatunde Amolegbe, former CIS President, noted the budget shortfall for 2025 makes borrowing inevitable, but called for efficient usage and repayment planning.
“Borrowing isn’t the issue – it’s whether we have the capacity and discipline to repay and use the funds wisely.”
He added that issuing pension bonds isn’t new and has been done by past administrations.
“The pension bond should provide quick relief to retirees, while the government handles repayments over time.”
Economic analyst Clifford Egbomeade agreed, saying pension clearance could boost domestic spending, but warned that transparency and reform are critical.
“If used properly and tied to growth sectors, the loans could support development. But Nigeria’s already-high debt demands careful planning to avoid more strain.”
