Nigeria’s external debt may top N200trn by year end – Daily Trust

From Abdullateef Aliyu, Lagos; Hussein Yahaya & Mumini Abdulkareem, Ilorin

President Bola Tinubu has written to the Senate requesting approval for the Federal Government’s 2026–2027 Supplementary External Borrowing Plan, totaling $20.52 billion and €1.05 billion (approximately $21.5 billion combined), a move that could push Nigeria’s external debt burden higher as the Federal Government seeks additional funds for infrastructure and other critical sectors.

The proposed borrowing comprises $20.52 billion and €1.05 billion, equivalent to approximately $21.5 billion combined.

At prevailing exchange rates, the facility could translate into about N30 trillion, further increasing the naira value of the country’s external debt.

If approved and fully borrowed, the new facility could contribute to Nigeria’s external debt exceeding N200 trillion in naira terms by the end of the year, depending on exchange-rate movements, actual disbursements and other changes in the debt stock.

Daily Trust reports that Nigeria’s total public debt rose to N166.79 trillion as of June 30, 2026, according to the Debt Management Office (DMO).

The figure showed that the country’s public debt stock increased by N7.44 trillion within three months, rising from N159.35 trillion at the end of March 2026 to N166.79 trillion by the end of June.

The DMO is yet to release figure for the nine-month period but with increasing debt numbers, it is projected that the debt profile would balloon further and could hit over N200 trillion by the end of the year if the latest borrowing is added.

In a letter addressed to Senate President Godswill Akpabio on Tuesday, Tinubu requested the early consideration and approval of the Federal Government’s 2026–2027 Supplementary External Borrowing Plan.

The President said the proposed loans were necessary to bridge funding gaps and address the country’s infrastructure deficit, with investments planned across the 36 states and the Federal Capital Territory.

The projects are expected to cover power, transportation, healthcare, education, agriculture, water supply, security, job creation and financial management reforms.

“I submit the attached Federal Government 2026–2027 Supplementary External Borrowing Plan for consideration and early approval of the National Assembly to ensure prompt implementation of our projects,” Tinubu stated in the letter.

He explained that the projects had undergone technical and economic assessments to ensure that they deliver significant benefits, particularly in poverty reduction, skills acquisition, entrepreneurship and food security.

According to him, the scale of Nigeria’s infrastructure needs and the financial resources required to address them have made additional external financing necessary.

“In light of the need for significant infrastructure investment in the country and the vast financial resources needed to address this gap, it has become essential to pursue prudent external borrowings to close the financing shortfall,” the President said.

The request was presented to the Senate during plenary, where Akpabio observed that aspects of the borrowing framework had featured in previous government borrowing plans.

He subsequently referred the proposal to the Senate Committee on Local and Foreign Debts, chaired by Senator Haruna Manu, for detailed scrutiny.

The committees on Appropriations and Finance, Akpabio stated, would also contribute to the legislative review.

Akpabio said the borrowing framework had previously received attention in the government’s budget and external borrowing plans covering 2025 to 2027.

“However, this request will be looked at by the Committee on Local and Foreign Debts,” he said, adding that the committee would clarify the scope of the proposal before further legislative action.

Daily Trust reports that the new request forms part of the borrowing plan to fund the 2026 budget deficit.

In the N68.32 trillion budget approved for 2026, the deficit stands at N23.85 trillion and it is expected to be funded through loans.

However, the proposed borrowing comes amid concerns about Nigeria’s growing debt obligations and the rising cost of servicing public debt.

Many experts have also called for caution over the rising borrowing amidst sustainability concerns.

Speaking on the latest borrowing plan, an economist at Al-Hikmah University, Ilorin, Dr Muhammad Bashir-Yusuf, said borrowing to finance critical infrastructure was a normal practice, provided the funds were used for their intended purposes.

He said governments resorted to domestic or external borrowing when their projected expenditure exceeded available revenue.

He added that infrastructure investment was essential to improving productivity, attracting investors and expanding the country’s revenue base.

“If they are borrowing to finance critical infrastructure, I think every country does that, and that is normal. It is when you have infrastructure that you will be able to generate more revenue,” he said.

Bashir-Yusuf, however, warned that diverting the funds from the projects for which they were obtained would undermine the purpose of the borrowing and leave the country with debts without corresponding development benefits.

“The problem will now be if they have gotten the approval and actually gotten the loan but refuse to use it for what it has been borrowed for.

“Then that will be a problem, because eventually, we will be borrowing for people to invest in, and that will not be good,” he said.

Addressing concerns over Nigeria’s rising public debt despite the removal of the petrol subsidy, the economist said the country’s total debt figures included obligations incurred by the Federal Government, state governments and the Federal Capital Territory.

He explained that the funds distributed to state governments were provided for under the Constitution and were not discretionary allocations that the Federal Government could withhold because of political differences.

Bashir-Yusuf said concerns about how the funds were spent should be directed at the respective state governments, while the Federal Government should be held accountable for its own expenditure.

He added that the priority should be to ensure that the proposed borrowing translated into tangible infrastructure and economic development, rather than allowing the funds to be diverted from their stated purposes.

“What concerns us now is to make sure that this money, since we have said they are going to get it, is used for what they have borrowed it for. If they do that, then we will all see the impact in the nearest future,” he submitted.

…Don’t approve the loan, Atiku tells NASS

Former Vice-President and African Democratic Congress (ADC) Presidential Candidate, Atiku Abubakar, has said President Bola Tinubu’s request for approval to borrow $20.52 billion and €1.045 billion vindicates his October 12 warning about a loan plan of up to $20 billion.

Atiku said the President’s failure to identify the specific projects the loans would fund raises serious concerns that borrowed public money could be channelled through the Lagos–Calabar Coastal Highway, now rerouted inland, to political campaigners and favoured contractors.

In a statement issued by Phrank Shaibu, Director of Strategic Communication of the ADC Presidential Campaign Council, Atiku said: “On October 12, I warned Nigerians that President Tinubu was reportedly preparing to borrow up to $20 billion in connection with the Lagos–Calabar Coastal Highway. I asked him to confirm or deny the plan and publish the accounts. He did neither. Today, he has asked the Senate to approve $20.52 billion and €1.045 billion in external loans. My warning has been vindicated.

“The President has listed broad sectors but has not provided a project by project account of what this enormous borrowing will fund. Nigerians have not been given clear project details, costs, locations or contractors to scrutinise.

“That silence is especially troubling given the highway’s inland rerouting. Nigerians have every right to ask whether it is becoming a pipeline for borrowed money to reach Tinubu’s campaigners and favoured contractors. Barely 12 weeks before an election, how can the President ask lawmakers to saddle Nigerians with more than $20 billion and €1 billion in debt without identifying the projects and their costs? Is this a development plan for Nigerians or a campaign financing scheme dressed up as infrastructure?

“You cannot continue taking frivolous loans on the eve of your departure from office. Let it be on record that one of the first responsibilities I will undertake as President is to scrutinise and investigate every kobo borrowed, especially loans taken in the final year of your tenure. Nigerians will ask questions, and we will find the answers by every lawful means.

“I put local and international lenders on notice: any loan granted to this winding down administration must meet all constitutional, statutory and due process requirements. Upon assumption of office, I will scrutinise every such loan. Any borrowing found to have been obtained without proper authorisation or process will be challenged and will not be allowed to stand.

“The National Assembly must not approve a single dollar until the President publishes every project, contract, cost, contractor, loan term and repayment obligation. No public money should be borrowed in the dark, and no lawmaker should sign a blank cheque against Nigeria’s future.”

Atiku said the burden was on Tinubu to prove that the borrowing would serve the country, not his political interests. He urged lawmakers to publish the proposal and supporting documents and subject them to rigorous scrutiny before any decision.