Tinubu is taking $24 billion in new loans weeks after clearing IMF debt

Just weeks after celebrating the repayment of a $3.3 billion loan to the International Monetary Fund, the Nigerian government is seeking fresh loans worth over $24 billion.

President Bola Tinubu has submitted a formal request to the National Assembly to approve a new borrowing plan that includes $21.54 billion, €2.19 billion, and ¥15 billion in foreign loans, alongside a ₦713 billion ($479 million) domestic bond issuance.

The government says the funds will finance key infrastructure and social programmes in health, education, agriculture, security, and pensions. A €65 million grant is also part of the package.

At current rates, the euro and yen components add approximately $2.5 billion and $102 million, pushing the total borrowing package to about $24.1 billion. At the prevailing official exchange rate of ₦1,583.74/$1, the new borrowing could increase Nigeria’s public debt by over ₦38 trillion, raising total debt stock from ₦144.7 trillion in 2024 to about ₦183 trillion by 2026.

Mounting Fiscal Strain

The proposed loans come amid rising concerns over Nigeria’s debt sustainability. In the first two months of 2025, the federal government spent $885 million servicing debt, surpassing its total revenue of $675 million during the same period. That places Nigeria’s debt-service-to-revenue ratio above 130%, far beyond acceptable thresholds.

Despite assurances that the loans will fund development, economists warn of dire implications. Exchange rate risks, rising interest payments, and tighter liquidity could choke private sector borrowing and weaken investor confidence.

Former Vice President Atiku Abubakar called the move “reckless and dangerous,” accusing the administration of sustaining a debt spiral. “This addiction to borrowing has turned public finance into a Ponzi scheme—borrowing to service old loans, then borrowing again to pay interest,” he said.

Since 2015, public debt has soared by over 1,000%, from ₦12.6 trillion to ₦144.7 trillion. Under Tinubu, who assumed office in 2023, it has already jumped more than 65%. Nigeria’s debt-to-GDP ratio has breached 50%, signalling escalating risk.

Critics say the government has failed to curb wasteful spending and lacks transparency on how borrowed funds are used. Seun Onigbinde of BudgIT questioned the rationale behind the new debt: “We’re in an era of sky-high revenues. Why are we borrowing to fund budget lines for tricycles and solar street lights?”

Calls for Accountability

Opposition leaders, economists, and civil society groups are urging lawmakers to reject or heavily scrutinize the proposal. Many demand clear repayment terms, transparent disbursement, and regular public reporting.

“This is more than a fiscal issue—it’s a question of national survival,” Atiku warned. “We call on the National Assembly, civil society, and global partners to act before it’s too late.”

The finance ministry claimed the borrowing plan won’t automatically increase Nigeria’s debt, as disbursements will be staggered and sourced from development partners offering concessional terms. The loans are expected to come from institutions like the World Bank, AfDB, China EximBank, and others, it said.