On May 28, 2025, President Bola Tinubu’s request to the National Assembly for approval of a $24.14 billion foreign loan package sparked concerns over Nigeria’s ballooning public debt, projected to reach N182.91 trillion by 2026. At the official exchange rate of N1,579/$1 as of May 28, 2025, the proposed borrowing—comprising $21.54 billion, €2.19 billion (approximately $2.5 billion at €1 = $1.1381), and ¥15 billion (approximately $102 million at ¥1 = $0.0068)—translates to roughly N38.13 trillion, a slight adjustment from earlier estimates due to the updated exchange rate. This would increase Nigeria’s total public debt from N144.67 trillion at the end of 2024 by 26.35%, pushing external debt from $45.78 billion to approximately $69.92 billion, a 52.7% rise.
As of December 31, 2024, Nigeria’s public debt stood at N144.67 trillion, up 48.58% from N97.34 trillion in 2023, driven by increased domestic and external borrowings and naira depreciation. External debt surged 83.89% to N70.29 trillion ($45.78 billion) from N38.22 trillion ($42.5 billion), while domestic debt rose 25.77% to N74.38 trillion from N59.12 trillion. The Federal Government’s debt accounted for N133.33 trillion, including N70.41 trillion domestic and N62.92 trillion external, with states and the Federal Capital Territory owing N3.97 trillion. The new loans would inflate the Federal Government’s debt by 28.61%, significantly impacting the national debt profile.
President Tinubu’s letter to the House of Representatives outlined that the 2025–2026 borrowing plan targets critical sectors such as infrastructure, agriculture, healthcare, education, water resources, security, and public finance reforms to stimulate growth, create jobs, and improve service delivery. However, economists warn of rising debt-servicing pressures, with N15.81 trillion allocated for debt servicing in the 2025 budget, projected to increase to N9.3 trillion in 2025 and N11.1 trillion by 2026. A $1.118 billion Eurobond repayment due in November 2025 and ongoing IMF charges of approximately $30 million annually in Special Drawing Rights further strain Nigeria’s fiscal position.
The National Assembly is poised to approve the loan, but concerns persist about Nigeria’s debt sustainability, with a debt-to-GDP ratio already at 52.9%, exceeding the IMF’s 40% prudential ceiling for developing nations. Posts on X reflect public unease, highlighting the risk of fiscal strain amid high debt-service-to-revenue ratios and currency devaluation. Continued borrowing without addressing revenue challenges and corruption could exacerbate Nigeria’s economic vulnerabilities, economists caution.
