Nigeria’s total public debt is on course to cross ₦180 trillion, following a formal request by President Bola Tinubu to the National Assembly for authorisation to secure additional external and domestic financing worth ₦34.15 trillion.
In the official correspondence sent to both legislative chambers, President Tinubu outlined a proposal for external loans amounting to more than $21.5 billion, equivalent to about ₦33.39 trillion based on the current exchange rate of ₦1,590 to the dollar.
Tinubu had requested the backing of the National Assembly for a new round of borrowing aimed at stabilising Nigeria’s economy and addressing key infrastructure and pension challenges.
The request, laid out in three separate letters read on the floor of the House of Representatives by Speaker Tajudeen Abbas, outlines plans for substantial foreign and domestic borrowing.
In one of the letters, the president proposed the establishment of a foreign currency-denominated issuance programme within Nigeria’s local debt market. This initiative, which would be managed by the Debt Management Office (DMO), is expected to raise $2 billion under the provisions of the Presidential Executive Order on Foreign Currency Denominated Financial Instruments, Local Issues Programme of 2023.
According to Tinubu, the aim is not merely to borrow but to create local opportunities for dollar-denominated investments, deepen the financial market, and stabilise the foreign exchange system. He stated that “the proceeds will be channelled into critical sectors of the economy capable of driving growth, enhancing infrastructure, creating employment, and boosting foreign exchange inflows.”
The proposal includes a broader external borrowing plan that totals $21.54 billion, €2.19 billion, and 15 billion Japanese Yen, along with a grant of €65 million. The president emphasised the urgent need for this facility in light of the economic strain caused by fuel subsidy removal and other fiscal adjustments.
“In light of the significant infrastructure deficit in the country and the paucity of financial resources needed to address this gap amid declining domestic demand, it has become essential to pursue prudent economic borrowing to close the financial shortfall,” he explained.
Tinubu assured the legislature that the funds would be used to deliver large-scale infrastructure projects, with a focus on transportation, healthcare, and other development programs in all 36 states and the Federal Capital Territory. He added that “this initiative aims to generate employment, promote skill acquisition, foster entrepreneurship, reduce poverty, and enhance food security, as well as to improve the livelihoods of Nigerians.”
He urged lawmakers to act swiftly in approving the requests and reiterated his administration’s pledge to maintain transparency and responsible financial management.
The Senate referred the borrowing proposal to its committee on local and foreign debts, while the House assigned it to the committees on national planning and pensions for detailed consideration.
Nigeria’s public debt rises
Nigeria’s public debt ballooned by nearly 49 per cent in 2024, reaching ₦144.66 trillion, up from ₦97.34 trillion the previous year. Of this, the Federal Government alone accounted for ₦137.28 trillion, or 95 per cent of the total.
With the new borrowing requests and the ₦10.85 trillion already raised from domestic markets between January and April 2025, the total debt is now projected to exceed ₦180 trillion.
The government’s ability to manage its debt repayments appears to be weakening. The debt service-to-revenue ratio rose to 131 per cent during January and February 2025, a significant jump from 118 per cent during the same period in 2024.
Central Bank data for the first two months of 2025 shows that the government spent ₦1.399 trillion on servicing debts, a 25% increase from ₦1.117 trillion the previous year. Meanwhile, revenue over the same period grew by just 13%, from ₦943.4 billion to ₦1.067 trillion.
