Nigeria’s public debt could rise sharply in the coming months, with the debt per citizen projected to reach nearly N800,000 if the Senate approves a fresh $21.5 billion external borrowing request submitted by President Bola Tinubu.
The request submitted Tuesday, alongside additional plans to borrow ¥15 billion (Japanese Yen) and secure a €65 million grant, is part of a rolling 2024–2026 Medium-Term External Borrowing Plan previously outlined by the federal government.
Although government officials clarify that this is not a new borrowing proposal in concept, its legislative activation would significantly increase Nigeria’s debt stock, which currently stands at N144.25 trillion as of Q1 2025, according to the Debt Management Office (DMO).
When projected forward, the approval and disbursement of the loan could push the country’s total debt burden toward N178.57 trillion. Nigeria, with an estimated population of approximately 220 million, would equate to about N800,000 per citizen, a symbolic figure highlighting the personal weight of national borrowing.
In a letter read on the floor of the Senate, President Tinubu emphasised that the funds would be targeted at critical infrastructure projects, including rail, healthcare, and power. He said the loans are necessary following the removal of the fuel subsidy and its ripple effects across the economy, and are designed to “support job creation, skill acquisition, poverty reduction, and food security” across the country’s 36 states and the Federal Capital Territory.
Yet, many observers and analysts remain concerned about the rising debt profile and the lack of a clear fiscal safety net amid declining oil revenues. While the President’s team insists that the loan is part of a long-standing strategy, economic officials have not articulated a comprehensive plan to deal with the current oil price slump, which poses a threat to the government’s N54 trillion 2025 budget.
When asked about contingency plans in the event of prolonged oil revenue shortfalls, top economic officials failed to provide clarity, raising questions about the government’s preparedness. The situation has further been complicated by emerging external pressures on Nigeria’s non-oil economy.
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Last Thursday, the President’s Economic Management Team (EMT) convened to respond to a brewing trade crisis with the United States, where a 14 per cent reciprocal tariff has been imposed on Nigerian exports. Though framed as a response to Nigeria’s average 27 per cent import duty, the U.S. measure threatens key growth sectors such as cocoa butter, urea fertilizer, textiles, and dried fruits—undermining export gains made since the COVID-19 pandemic.
The meeting, chaired by Finance and Coordinating Minister of the Economy Wale Edun, focused on policy alignment, investor confidence, and diplomatic engagement. “Now is the time for unified action,” Edun said. “By aligning our trade posture with global best practice and ensuring policy consistency, we can unlock greater opportunities for businesses.”
Industry, Trade and Investment Minister Jumoke Oduwole also presented priorities including export diversification and removing regulatory bottlenecks. The EMT is expected to intensify outreach to Washington through platforms like the U.S.-Africa CEO Forum in Abidjan.
Meanwhile, the Tinubu administration recently completed repayment of a $3.4 billion IMF loan obtained in 2020 under the Rapid Financing Instrument to cushion the pandemic-era economic shock. The loan was repaid in tranches between 2023 and April 2025, but Nigeria will continue to pay annual charges of around $30 million until its Special Drawing Rights (SDR) quota is fully restored.
According to data from the Debt Management Office (DMO), Nigeria’s external debt currently exceeds $45 billion, while domestic debt is estimated at over N85 trillion. The Central Bank of Nigeria (CBN) has warned that debt servicing could consume nearly 30 per cent of federal revenues this year—a staggering figure for a country grappling with inflation, high unemployment, and widespread poverty.
In addition to the external borrowing plan, the President has requested approval to issue bonds worth over N757.9 billion to clear outstanding pension liabilities, further expanding the government’s financial commitments.
Fuel subsidy removal in mid-2023 was initially presented as a reform to free up more than N11 trillion annually for infrastructure and social investment. However, nearly two years later, questions persist about how those funds were utilized across federal and subnational levels. With no visible reduction in borrowing and weak fiscal buffers, the government is under growing pressure to show where the savings went.
With the Senate preparing to debate the borrowing plan, economists and civil society groups are urging greater transparency and project accountability. While borrowing itself is not inherently negative, they argue, it must be tied to verifiable and productive outcomes not just used to plug fiscal gaps.
If the full loan plan is approved, Nigerians will face a symbolic but sobering milestone: a national debt that translates to N800,000 per citizen, a figure that underscores both the weight of Nigeria’s fiscal challenges and the urgency of reform.
(Inside Business Online)
