ABUJA — Nigeria’s public debt is expected to surpass N180 trillion following President Bola Tinubu’s fresh request to the National Assembly for approval of new loans totaling N34.15 trillion. The borrowing plan includes external loans worth $21.5 billion (N33.39 trillion) and a domestic bond issuance of N757.9 billion to offset pension arrears.
In letters read during plenary by Senate President Godswill Akpabio and House Speaker Tajudeen Abbas, Tinubu explained that the loans are vital to address Nigeria’s infrastructure gap, improve key sectors, and ease the financial pressure resulting from fuel subsidy removal. The President highlighted that the 2025–2026 borrowing plan targets infrastructure, agriculture, health, education, water supply, and job creation.
The proposed external loan package includes $21.54 billion, €2.19 billion, and 15 billion Japanese Yen, along with a €65 million grant. Tinubu assured lawmakers that the funds would be invested in railways, healthcare, and other developmental projects across the 36 states and the FCT. He said the initiative aims to stimulate job creation, boost entrepreneurship, reduce poverty, and improve food security.
In a separate letter, the President sought approval for the issuance of bonds to settle pension liabilities under the Contributory Pension Scheme, totaling N757.98 billion. He noted that the federal government had failed to meet its obligations due to revenue challenges, which had led to a buildup of pension arrears. He stressed that clearing the backlog would improve retirees’ welfare and restore public confidence in the pension system.
The request for the pension bond had already been approved by the Federal Executive Council during its February 4, 2025 meeting. Tinubu urged the National Assembly to approve the proposals swiftly, assuring transparency and accountability in fund utilization.
Nigeria’s public debt stood at N144.66 trillion at the end of 2024, up from N97.34 trillion in 2023, with the federal government responsible for 95% of the total. When added to the N10.85 trillion borrowed domestically in the first four months of 2025, the total debt could exceed N180 trillion.
Debt servicing costs continue to rise, with the government spending N1.399 trillion in the first two months of 2025, a 25% year-on-year increase. During the same period, revenue grew by just 13% to N1.067 trillion. This pushed the debt service-to-revenue ratio to 131%, up from 118% in early 2024.
Economists have expressed concern over the size of the new borrowing plan and its potential impact on debt servicing. Tunde Abidoye, Head of Equity Research at FBNQuest Merchant Bank, warned of the risks tied to exchange rates and the growing fiscal burden. Former Chartered Institute of Stockbrokers president Olatunde Amolegbe acknowledged the necessity of the loans but emphasized the need for careful fund management and repayment capability. He said previous administrations had also issued pension bonds and that the move is not unusual.
Economic analyst Clifford Egbomeade said the borrowing could be beneficial if it is tied to targeted reforms and used efficiently. He added that addressing pension arrears could stimulate consumption and economic activity, but stressed that transparency and planning are critical to avoid deepening fiscal strain.
The Senate referred the request to its committee on local debts, while the House of Representatives assigned it to the committees on national planning, economic development, and pensions. Their reports will guide further legislative action.
