Economy

Tinubu Administration Eyes ₦17trn in Fresh Borrowings, Public Debt Nears ₦162trn

Written by Agboola Oluwafemi on May 28, 2025

News Views: 251

Nigeria’s total public debt is projected to rise to approximately ₦162.025 trillion following the federal government’s request for fresh borrowings under the 2025-2026 external financing plan. President Bola Ahmed Tinubu has sought National Assembly approval for loans amounting to $21.5 billion, €2.19 billion, 15 billion Japanese yen, and a €65 million grant equivalent to ₦17.355 trillion at the current exchange rate.

This would significantly increase Nigeria’s debt stock, which stood at ₦144.67 trillion as of December 2024. Of this, ₦56.6 trillion was incurred under Tinubu’s administration, having inherited ₦87.379 trillion from his predecessor.

The proposed loans are intended to finance key development projects in infrastructure, healthcare, education, agriculture, power, and security, across all 36 states and the Federal Capital Territory. The president emphasized the need for external borrowing due to revenue shortfalls and the economic impact of subsidy removal.

Additionally, the government is seeking legislative consent to raise $2 billion through foreign currency-denominated instruments in the domestic market and to issue ₦757.98 billion in bonds to offset outstanding pension liabilities under the Contributory Pension Scheme.

Economic analysts have expressed concern over the sustainability of Nigeria’s growing debt and questioned the effectiveness of past borrowings, given persistent poverty, inflation, and insecurity. Nonetheless, some experts argue that external borrowing remains viable if funds are tied to productive, well monitored projects.

By year end 2024, Nigeria’s debt had increased by 48.58% year-on-year, rising from ₦97.34 trillion in December 2023 to ₦144.67 trillion. External debt alone surged by 83.89%, driven by new borrowings and currency depreciation. External obligations now account for 48.59% of total public debt, underscoring Nigeria’s heightened exposure to global economic shifts and exchange rate volatility.

Of the ₦54.2 trillion budget approved for 2025, ₦14.3 trillion is allocated for debt servicing, with a fiscal deficit of ₦13.08 trillion, reflecting growing pressure on public finances.