President Bola Tinubu’s request to the National Assembly for a fresh $24 billion loan has raised renewed and, indeed, genuine concerns about the nation’s ballooning debt profile and its implications for overall fiscal sustainability.
President Tinubu stated that the new loans would enable his administration to create jobs, promote skill acquisition, enhance entrepreneurship, reduce poverty, and improve food security nationwide.
Considering that these pressing issues have long plagued the nation and appear to have been insufficiently addressed, the request sounds, on the surface, plausible.
However, the real snag lies in the judicious use of such loans. The reasons for seeking new loans have always been the same: to address the infrastructure deficit that remains unresolved, to create jobs that are never forthcoming, and to improve security that has consistently remained precarious.
The recurring question, therefore, is how previous loans were utilised? Why is a government that suspended fuel subsidy payments in a bid to raise more revenue now inundating the nation with fresh loan requests? Why should citizens not be worried when the same government, through its agencies – the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices and Other Related Offences Commission (ICPC) – reportedly recovered ₦277 billion and $105 million in 2024 alone, yet still seeks external borrowing, despite the prospect of recovering more stolen funds?
According to the Debt Management Office (DMO), as of December 31, 2024, Nigeria’s total debt stock stood at ₦144.7 trillion – about $98 billion at the current exchange rate. A breakdown of this figure shows that ₦74.4 trillion, or 51.4%, is domestic debt, while ₦70.3 trillion, or 48.6%, is external debt.
Unsurprisingly, this debt burden has broader implications for the country’s fiscal priorities, particularly with regard to revenue allocation. A significant portion of national revenue is now consumed by debt servicing, which has seen a worrying upward trajectory. In 2022, the nation spent ₦3.52 trillion on debt servicing; in 2023, ₦7.8 trillion; and in 2024, a staggering ₦13.12 trillion. For 2025, the government has proposed to spend ₦15.81 trillion on debt servicing. Fitch Ratings also projects that Nigeria’s external debt servicing will rise to $5.2 billion in 2025.
Needless to say, high debt servicing costs mean less funding is available for critical infrastructure and social services. This significantly hampers economic growth and development.
For this reason alone, the government must urgently rethink its borrowing strategy and cut down on excessive spending. We acknowledge that when properly utilised, borrowing can be a critical tool for national development. In fact, to a large extent, borrowing is a necessity. But not in the manner we have witnessed in Nigeria – where successive governments, despite the challenges posed by existing debts, borrow endlessly under the pretext of financing projects that are rarely executed.
Curiously, this fresh loan request comes amid heightened politicking ahead of the 2027 elections, with allegations that the government is using incentives, including financial inducements, to woo opposition figures into joining the ruling party. The timing of this request raises valid suspicions.
Many Nigerians believe that, if approved, this loan will follow the same path as previous borrowings – mismanaged, unaccounted for, and ultimately worsening the nation’s economic woes. We could not agree more.
It is difficult to rationalise a borrowing spree when public officials continue to indulge in extravagant lifestyles. Such fiscal recklessness sends the wrong message to both citizens and international lending institutions – reinforcing the notion that Nigeria’s problem is not revenue generation but expenditure control.
At the current pace, we risk saddling future generations with unsustainable debt and little to show for it. A government that approved ₦58 billion for lawmakers to purchase sport utility vehicles and spent ₦21 billion renovating the Vice President’s residence, among other questionable expenditures, cannot in good conscience impose more debt on the citizenry.
In our view, this fresh loan request is unjustified. Rather than plunging the nation further into debt, the Tinubu administration should realign its priorities – block revenue leakages, stop budget padding by lawmakers, cut down on wasteful spending, recover looted funds, and focus on servicing and reducing the existing debt burden.
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