Nigeria’s Senate has granted approval to President Bola Ahmed Tinubu’s request to borrow more than $21 billion from external sources to support the country’s 2025 national budget, a move that has sparked fresh debate over the rising debt burden of Africa’s largest economy.
The Senate’s decision, confirmed late Tuesday by senior lawmakers in Abuja, follows a formal request submitted by the President in May. The proposed borrowing plan is intended to address Nigeria’s widening fiscal deficit and provide funding for critical infrastructure and development projects across key sectors of the economy.
According to documents presented to the National Assembly, the loans are expected to come from a mix of multilateral and bilateral sources, including the World Bank, the African Development Bank (AfDB), and other international development partners.
Senate President Godswill Akpabio described the loan approval as a “necessary step” to ensure the implementation of the 2025 national budget, stressing that the funds are urgently needed to meet essential national obligations.
“This is not a luxury. It is a necessity,” Akpabio said during Tuesday’s plenary session. “Nigeria is at a critical juncture, and we must act decisively to protect the economy and provide the infrastructure and services our people need.”
He emphasised that the funds would be channeled into key areas such as transportation, healthcare, education, water, agriculture, and power—sectors seen as vital to job creation and long-term economic growth.
Despite the Senate’s endorsement, the move has drawn criticism from economists and opposition voices, who warn that Nigeria’s rising debt profile poses serious risks to fiscal stability. Many fear that the increasing reliance on external borrowing could saddle future generations with unsustainable debt repayment obligations.
Nigeria’s total public debt stood at over ₦97 trillion (approximately $69 billion) at the end of the first quarter of 2025, according to data from the Debt Management Office (DMO). With the Senate’s latest approval, that figure is expected to rise significantly, raising fresh concerns about the country’s debt-to-GDP ratio, which already exceeds regional averages.
Critics argue that while borrowing may offer short-term relief, it fails to address the structural weaknesses in Nigeria’s economy, including low non-oil revenue, high recurrent expenditure, and over-dependence on oil exports.
“This new loan will deepen our debt crisis unless there are concrete strategies for economic diversification and revenue expansion,” said Dr. Temitope Adedeji, an economist and public finance expert based in Lagos. “We cannot keep borrowing to fund consumption or poorly implemented projects. There must be value for money.”
Nigeria has struggled with macroeconomic instability in recent years, exacerbated by a sharp decline in global oil prices, foreign exchange shortages, and a depreciating naira. Inflation has soared above 30%, eroding household incomes and pushing more Nigerians below the poverty line. Tinubu’s administration has pledged to stabilise the economy through structural reforms, improved revenue generation, and targeted investments—but the road ahead remains uncertain.
In defense of the borrowing plan, Senate Committee Chairman on Local and Foreign Debt, Senator Haruna Manu, noted that most of the loans would be concessional, with long-term repayment windows and low interest rates. He argued that the terms of the borrowing were favorable and aligned with Nigeria’s development goals.
“Contrary to the fear being peddled, these are not commercial loans. They are concessional in nature and tied to specific, high-impact projects that will benefit Nigerians,” Senator Manu told reporters after the session.
He added that parliamentary oversight would ensure transparency and accountability in the use of the funds. “The National Assembly will closely monitor every project financed by these loans to make sure they deliver results,” he said.
Among the projects to be financed under the borrowing plan are the Lagos-Kano standard gauge railway, rural electrification initiatives, education sector upgrades, healthcare infrastructure, water supply systems, and youth entrepreneurship schemes. The government says these investments will help drive economic recovery and improve living conditions for millions of Nigerians.
The Tinubu administration has also indicated that part of the loan will go toward shoring up foreign reserves, stabilising the exchange rate, and supporting the Central Bank’s monetary policy efforts.
Nonetheless, critics remain skeptical about the government’s capacity to manage the funds effectively, pointing to past instances of mismanagement, abandoned projects, and weak implementation of loan-funded programs.
“The question is not whether we should borrow, but how the money is spent,” said Aisha Suleiman, a financial analyst in Abuja. “We need transparency, we need results, and we need discipline.”
As Nigeria moves forward with its 2025 budget implementation, the spotlight will remain firmly on how the newly approved loans are utilised. The Senate’s greenlight gives President Tinubu a powerful tool to stimulate economic activity, but it also raises the stakes for delivering real, measurable outcomes that justify the borrowing.
With pressure mounting to ease economic hardship, restore investor confidence, and promote inclusive growth, the administration must now walk a tightrope between immediate financial needs and long-term fiscal prudence.
Whether the $21 billion borrowing plan will mark a turning point for Nigeria’s economy—or deepen its fiscal woes—will depend on transparency, accountability, and the government’s ability to execute its development agenda with precision and purpose.
