Manny Ita –
Nigeria’s rising debt profile has come under renewed scrutiny following the approval of a fresh $6 billion external loan by the National Assembly, a move projected to significantly increase the country’s total public debt.
The Senate approved the loan request submitted by President Bola Tinubu to finance budget deficits, support infrastructure development and refinance existing obligations, underscoring the government’s continued reliance on borrowing to fund fiscal operations.
Available data indicates that Nigeria’s total debt stock, which stood at about ₦146.69 trillion at the end of 2025, is expected to rise to approximately ₦155 trillion after the new borrowing is added, with the $6 billion facility alone contributing an estimated ₦8.4 trillion at current exchange rates.
The approval, which was granted within hours of the request being presented, has sparked concerns among economists and opposition figures over the pace of borrowing and the long-term sustainability of the country’s debt burden.
Further concerns stem from Nigeria’s expanding fiscal framework, as lawmakers also increased the 2026 budget while approving additional borrowing, a combination analysts say could deepen debt pressures despite improved oil revenues.
Economic experts have warned that the growing debt stock could push Nigeria closer to a higher debt threshold in the coming years, especially if borrowing continues at the current pace and the naira remains volatile. They note that external loans, which must be serviced in foreign currency, expose the country to exchange rate risks and rising debt service costs.
There are also fears that the debt service-to-revenue ratio—already estimated at around 60 percent—could worsen, limiting fiscal space for critical sectors such as health, education and infrastructure.
Critics have called for greater transparency in borrowing plans and clearer repayment strategies, arguing that while borrowing is not inherently problematic, unchecked accumulation without corresponding revenue growth could strain future budgets and economic stability.
The Federal Government, however, maintains that the loans are necessary to address infrastructure gaps, stimulate economic growth and meet pressing financial obligations, insisting that the borrowing strategy remains within acceptable limits.
