Nigeria’s public debt is set for another significant jump as President Bola Tinubu has requested the National Assembly’s approval to secure fresh foreign loans amounting to about $24.14bn.
At the prevailing official exchange rate of N1,583.74/$1, the proposed borrowing would add approximately N38.24tn to the existing debt stock, potentially pushing Nigeria’s total public debt from N144.67tn at the end of 2024 to over N182.91tn by 2026.
The fresh borrowing is composed of $21.54bn, €2.19bn, and ¥15bn. Using the latest market exchange rates—€1 to $1.1381 and ¥1 to $0.0068—the euro component converts to approximately $2.5bn while the Japanese yen translates to $102m.
In total, the new loans amount to an estimated $24.14bn. When converted at the official rate of N1,583.7388 to the dollar, the naira equivalent of these loans comes to N38.24tn.
As of December 31, 2024, Nigeria’s total public debt stood at N144.67tn, according to data from the Debt Management Office.
This represented a 48.58 per cent rise from the N97.34tn recorded at the end of 2023. The jump was driven by substantial increases in both domestic and external borrowings and compounded by the depreciation of the naira against major foreign currencies.
The exchange rate significantly raised the local currency equivalent of the country’s external debt, which surged from N38.22tn ($42.5bn) in December 2023 to N70.29tn ($45.78bn) by the end of 2024, marking an 83.89 per cent increase.
Similarly, domestic debt climbed from N59.12tn to N74.38tn during the same period, representing a 25.77 per cent rise.
The Federal Government accounted for N70.41tn of this amount, up from N53.26tn, while the debt owed by states and the Federal Capital Territory declined from N5.86tn to N3.97tn, indicating a more cautious approach by subnational governments.
If the new borrowing is approved in full, Nigeria’s external debt would increase from $45.78bn to roughly $69.92bn—an additional $24.14bn, representing a 52.7 per cent surge. In naira terms, this would push the external debt portion of Nigeria’s total public debt to over N108tn.
The proposed borrowing also represents a substantial increase relative to the Federal Government’s current indebtedness. As of December 2024, the Federal Government’s total debt stood at N133.33tn—comprising N70.41tn in domestic debt and N62.92tn in external debt.
The additional N38.24tn would increase this figure by 28.68 per cent. When compared to the total national debt of N144.67tn, the new loans represent a 26.43 per cent increase.
In a letter to the House of Representatives, President Tinubu explained that the external borrowing plan forms part of the 2025–2026 rolling borrowing programme and is aimed at supporting key sectors, including infrastructure, agriculture, healthcare, education, water resources, security, and public finance reforms.
He noted that the projects covered by the plan had undergone technical and economic appraisals and were selected for their potential to stimulate growth, generate jobs, and improve public service delivery.
In a separate request, the President sought approval for a $2bn foreign currency-denominated bond programme to be issued in Nigeria’s domestic debt market.
The initiative, which falls under the 2023 Presidential Executive Order on Foreign Currency Denominated Financial Instruments, is intended to deepen the domestic financial market, attract local dollar investments, strengthen foreign exchange reserves, and help stabilise the exchange rate.
However, the bond will also contribute to a higher debt servicing burden, since it must be repaid in foreign currency. Additionally, President Tinubu is requesting legislative backing to issue N757.98bn in bonds to clear outstanding pension liabilities under the Contributory Pension Scheme as of December 2023.
According to the Presidency, the move aligns with the Pension Reform Act 2014 and is aimed at alleviating hardship for retirees, restoring trust in the pension system, and improving morale among public servants. The Federal Executive Council approved the bond issuance earlier in the year.
These three initiatives combined—the $24.14bn external loan, the $2bn bond programme, and the N758bn pension bond—could significantly push Nigeria’s debt well beyond N182.91tn.
More concerning, the N182.91tn estimate does not include the trillions of naira in domestic debt that are likely to be raised over 2025 and 2026 to finance budget shortfalls, nor does it account for scheduled debt repayments.
Among the major repayments due in the near term is a $1.118bn Eurobond maturing in November 2025. Nigeria has also fully repaid the $3.4bn facility it obtained from the International Monetary Fund under the Rapid Financing Instrument in 2020.
However, the country remains liable for annual charges of roughly $30m in Special Drawing Rights. These repayments, along with interest and sinking fund obligations, will weigh further on Nigeria’s already tight fiscal position.
