Tinubu’s New Borrowing Plan Pushes Nigeria’s Debt to N183 Trillion Amid Economic Strains
President Bola Tinubu has proposed a fresh borrowing plan that will increase Nigeria’s total public debt from nearly ₦145 trillion at the end of 2024 to about ₦183 trillion. In a letter to the National Assembly, he requested approval for new external loans totaling $21.5 billion, €2.2 billion, and ¥15 billion, alongside a €65 million grant. Additionally, Tinubu sought permission to issue domestic bonds worth ₦757.9 billion to cover outstanding pension liabilities.
The new borrowing plan aims to address Nigeria’s significant infrastructure deficits and funding shortfalls caused by declining domestic revenue and the economic impact of fuel subsidy removal. Tinubu emphasized that the funds would be directed towards vital sectors such as infrastructure, agriculture, healthcare, education, security, and employment generation across all states and the Federal Capital Territory.
However, experts have raised concerns about the growing reliance on foreign debt, especially given the naira’s devaluation and Nigeria’s limited capacity to service expensive foreign loans. Emerging markets analyst Ike Ibeabuchi warned that the rising costs of foreign debt servicing could worsen economic challenges and urged the government to explore alternative revenue sources and reduce governance costs.
The president also highlighted the need to clear pension arrears accumulated under the Contributory Pension Scheme, which have strained retirees’ welfare due to revenue shortages. He requested legislative approval for issuing government bonds to offset these liabilities, aiming to restore confidence in the pension system and improve retirees’ living conditions.
The National Assembly has referred the borrowing requests to relevant committees, with the Senate’s Committee on Foreign and Domestic Loans expected to report back within two weeks. Tinubu assured lawmakers of his administration’s commitment to transparency and accountability as Nigeria navigates these significant financial decisions amid economic pressures.