President Bola Tinubu’s loan proposal to the National Assembly on Tuesday will take Nigeria’s total public debt to an astronomical N183 trillion from nearly N145 trillion as of December 2024, according to BusinessDay calculations.
President Tinubu wrote to the National Assembly yesterday, seeking legislative approval for a new external borrowing plan of $21.5 billion, €2.2 billion, and ¥15 billion, in addition to a grant of €65 million.
He also requested the National Assembly’s approval for the issuance of domestic bonds worth N757.9 billion to settle outstanding pension liabilities.
This now takes Nigeria’s total debt to over N183 trillion, putting pressure on the nation’s capacity to service foreign loans amid naira devaluation and weak government revenue.
“My own issue is on the foreign loans, which are now very expensive to both service and repay,” said Ike Ibeabuchi, an emerging markets analyst.
“We must reduce our exposure to foreign debt due to our currency issues. Its costs are very high now. More importantly, Nigeria must expand its revenue base and seek alternatives to debt such as equity, while working on reducing the cost of governance.”
In a detailed communication read separately by Senate President Godswill Akpabio and Speaker of the House of Representatives Abbas Tajudeen, Tinubu outlined the strategic importance of the 2025–2026 borrowing plan, which he said covered key sectors of the economy.
“The 2025–2026 borrowing plan covers all sectors with specific emphasis on infrastructure, agriculture, health, education, water supply, growth, security, and employment generation, as well as financial and monetary reforms, among others,” the president stated
Tinubu said the borrowing was necessary due to the impact of fuel subsidy removal and its broader economic consequences.
“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 wrote.
He assured lawmakers that the funds would be channelled into critical infrastructure projects, particularly in the areas of railway development, healthcare, and nationwide development programmes across all 36 states and the Federal Capital Territory (FCT).
“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,” Tinubu noted.
In a separate letter, the president sought legislative approval for the issuance of federal government bonds in the domestic market to offset accrued pension liabilities under the Contributory Pension Scheme (CPS), totalling N757,983,246,572.
Citing the Pension Reform Act 2014, Tinubu said the government had struggled to meet statutory pension obligations due to revenue shortfalls, leading to a build-up of arrears and worsening hardship among retirees.
“The Senate is invited to note that the federal government has not been compliant with the implementation of the above provisions of the PRA 2014 over the years due to revenue challenges, leading to accumulation of pension arrears with the attendant ICU retirees,” he stated.
He further said that the proposal to issue bonds for the pension liabilities received the Federal Executive Council (FEC)’s approval at its February 4, 2025 meeting.
According to the president, clearing the pension backlog would improve retirees’ welfare, restore confidence in the pension system, and boost liquidity in the economy.
“It will enable the Federal Government of Nigeria to meet obligations under the CPS and restore confidence in the pension industry.
“It will also ensure positive welfare even for the retirees, as this will enable them to meet their basic needs… improve health and avoid untimely death,” the letter noted.
Tinubu concluded by urging lawmakers to give the requests expedited consideration, assuring them of his administration’s commitment to transparency and accountability.
The Senate referred the requests to its Committee on Foreign and Domestic Loans, while the House of Representatives referred them to the Committee on National Planning and Economic Development, and the Committee on Pensions.
The Senate committee is expected to report back in two weeks.(BusinessDay)
