Nigeria’s total public debt stock is on course to reach approximately ₦155.1 trillion, after the Senate yesterday expeditiously approved President Bola Ahmed Tinubu’s request to secure fresh external financing of $6 billion.
The approval, which came barely three and a half hours after the President’s loan request letter was read on the floor of the upper chamber, will add roughly ₦8.4 trillion to Nigeria’s debt stock — on the assumption of an exchange rate of about ₦1,400 per US dollar — raising the figure from ₦146.69 trillion at the end of 2025 to ₦155.1 trillion.
Details of the Approved Loans
President Tinubu had communicated the loan request in two separate letters to Senate President Godswill Akpabio, which were read during plenary on 31 March 2026.
- The first letter sought approval to establish a structured Total Return Swap (TRS) financing programme of up to $5 billion with First Abu Dhabi Bank (UAE). The facility is to be drawn in tranches and is structured to support budget implementation, finance priority infrastructure projects, and refinance costly existing debt obligations.
- The second letter requested approval for a $1 billion export finance facility arranged by UK Export Finance through Citibank, London, intended for the rehabilitation and reconstruction of the Lagos Port Complex (Apapa) and Tin Can Island Port — critical nodes in Nigeria’s trade infrastructure.
Legislative Process and Rationale
The Senate’s approval followed the presentation and consideration of a report by Senator Aliyu Wamakko, Chairman of the Senate Committee on Local and Foreign Debts. Lawmakers backed the borrowing after deliberations that emphasised the urgent financing needs of the federal government.
Supporters in the legislature and the executive argue that the loans will help bridge the widening budget deficit, accelerate infrastructure development, and improve fiscal liquidity. The structured drawdown mechanism for the largest portion of the facility — the TRS — is designed to moderate immediate pressure on the debt stock.
Economic and Fiscal Context
As of December 31, 2025, Nigeria’s total public debt was estimated at about $110.3 billion, roughly equivalent to ₦159.2 trillion at current exchange rates.
Debt sustainability remains a central concern. By the end of 2025, the federal government’s debt service‑to‑revenue ratio was already estimated at around 60 per cent, meaning a significant portion of government revenue is absorbed by interest and principal payments.
Analysts warn that heavy reliance on external borrowing exposes the economy to foreign exchange risks. If the naira depreciates further against the dollar, the cost of servicing dollar‑denominated obligations could rise sharply, potentially worsening fiscal pressures.
Public and Political Reactions
The rapid approval by the Senate has drawn sharp criticism from opposition figures. Former Vice President Atiku Abubakar condemned the process as lacking legislative oversight and due diligence, describing the swift passage of the loan request as hazardous to Nigeria’s fiscal future. He warned that the country’s future was being “signed away in a matter of hours” without adequate debate or accountability.
Critics argue that recurring reliance on borrowing to finance budget shortfalls and infrastructure maintenance — rather than expanding revenue generation — may deepen Nigeria’s fiscal vulnerabilities. They have called for greater transparency, clear repayment strategies, and stronger controls on public spending.
