Nigeria’s public debt is poised for another historic leap as President Bola Tinubu seeks National Assembly approval to borrow an additional $24.14 billion in foreign loans. Economists, opposition leaders, and civil society groups are raising alarm over what could become the most significant debt surge in the country’s modern history, potentially pushing Nigeria’s total public debt beyond ₦182.91 trillion by 2026.
The loan request — part of a multi-pronged financial strategy — includes $21.54bn, €2.19bn, and ¥15bn, which convert to approximately $24.14bn using current exchange rates. At the official rate of ₦1,583.74/$1, the loans could add ₦38.24tn to Nigeria’s debt stock, which stood at ₦144.67tn as of December 2024, per the Debt Management Office (DMO).
If approved in full, this would mark a 26.43% increase in the total debt burden, with external loans alone accounting for a 52.7% jump — raising Nigeria’s external debt from $45.78bn to nearly $70bn. When converted to naira, the foreign debt component alone could exceed ₦108tn, a historic high.
According to official DMO data, Nigeria’s total debt rose by 48.58% in 2024, surging from ₦97.34tn in 2023 to ₦144.67tn at year-end 2024. This massive jump was fueled by both increased borrowing and a sharp depreciation of the naira, which elevated the local currency value of foreign loans.
External debt: Rose from ₦38.22tn ($42.5bn) to ₦70.29tn ($45.78bn) — an 83.89% increase.
Domestic debt: Climbed from ₦59.12tn to ₦74.38tn — a 25.77% increase.
Federal Government’s share: ₦70.41tn, up from ₦53.26tn.
State and FCT debt: Dropped from ₦5.86tn to ₦3.97tn, indicating tighter borrowing at the subnational level.
President Tinubu argues that the new borrowing is part of a 2025–2026 rolling borrowing plan aimed at funding transformative projects in infrastructure, agriculture, education, healthcare, public finance reform, water resources, and security.
“The proposed projects have been technically and economically appraised. They are designed to spur economic growth, create jobs, and improve public service delivery,” Tinubu said in his letter to the House of Representatives.
Alongside the $24.14bn foreign loan request, President Tinubu is seeking approval for two more debt instruments:
A $2bn foreign currency-denominated bond to be issued in Nigeria’s domestic market. This is expected to deepen domestic capital markets and stabilize forex reserves, but will increase dollar-denominated liabilities.
A ₦757.98bn bond issuance aimed at clearing outstanding pension liabilities under the Contributory Pension Scheme, dating back to December 2023. The Presidency says this move aligns with the Pension Reform Act 2014 and seeks to restore public confidence and support retired civil servants.
Combined, the three debt initiatives could push Nigeria’s public debt far beyond the ₦182.91tn threshold — a figure that excludes additional domestic borrowings anticipated to fund 2025–2026 budget deficits.
Observers warn that Nigeria’s rising debt obligations are becoming unsustainable. Already, debt servicing consumes a significant chunk of the national budget, outpacing capital expenditures and crowding out investments in critical sectors.
A major repayment looming is a $1.118bn Eurobond due in November 2025. While Nigeria has fully repaid a $3.4bn IMF Rapid Financing Instrument loan from 2020, it still pays $30m annually in Special Drawing Rights charges.
Experts have raised red flags over the size, timing, and structure of the loans, calling for strict accountability and transparency.
Johnson Chukwu, CEO of Cowry Asset Management, said the key issue is not the volume of borrowing but the utilisation of funds.
“Borrowing isn’t bad if funds are invested in projects that yield greater economic returns than the cost of the loans,” he said, stressing that wasteful spending would only worsen Nigeria’s economic woes.
Chukwu recommended public-private partnerships as a more sustainable alternative to government-led infrastructure projects, noting that private sector involvement would reduce costs and enhance efficiency.
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, said the government must prioritize revenue generation over accumulating debt.
“Our debt service obligations have overtaken capital spending. This trend is unsustainable and worrying,” he cautioned.
Yusuf added that while ongoing reforms and a recovering oil sector may improve revenues, all new borrowing must undergo cost-benefit analysis.
The Peoples Democratic Party (PDP) and former Vice President Atiku Abubakar have both slammed the loan proposal, describing it as irresponsible and opaque.
PDP National Publicity Secretary Debo Ologunagba accused the Tinubu administration of borrowing recklessly without providing detailed accounts of previous debts.
“The APC-led government has borrowed trillions since Buhari’s tenure, yet Nigerians have seen little to no improvement. This is not governance; it’s financial mismanagement,” he said.
Atiku, through his spokesperson Paul Ibe, questioned the justification for new loans when there are no visible outcomes from existing debt.
“What has happened to the funds borrowed so far? Why is there no impact on critical infrastructure, power, education, or healthcare?” he asked.
Civil society groups and analysts have echoed the concerns.
Debo Adeniran, Chairman of the Centre for Accountability and Open Leadership, said Nigeria has the resources to finance development internally and must cut unnecessary spending.
Auwal Musa Rafsanjani, Executive Director of the Civil Society Legislative Advocacy Centre, criticized the government’s continuous borrowing without proof of impact, citing the $3.4bn IMF loan as an example.
Emmanuel Onwubiko, National Coordinator of the Human Rights Writers Association of Nigeria, called the move reckless and called on Nigerians to demand accountability from the “rubber-stamp National Assembly.”
Vahyala Kwaga, Group Head of Research at BudgIT, warned that the fresh debt would push Nigeria close to its self-imposed debt-to-GDP ceiling of 40%, breaching sustainability benchmarks and heightening the risk of default.
Nigeria’s fiscal space is tightening, with limited buffers left to absorb economic shocks. Inflation remains stubbornly high, the naira continues to weaken, and unemployment persists. Analysts say that unless new loans are tied strictly to value-generating projects, the nation risks falling into a debt trap that mortgages its future.
While the Tinubu administration insists that the borrowings are essential for economic growth, rising public skepticism and the lack of visible returns from past loans may pose political and economic risks. As Nigerians brace for more austerity, the debate around debt sustainability, transparency, and intergenerational equity is more urgent than ever.