PRESIDENT Bola Tinubu has asked the National Assembly to approve new foreign loans worth $24.14 billion, a move that could raise Nigeria’s total debt to N183 trillion, if approved.
If this happens, every Nigerian could owe about N770,000 based on the country’s estimated population of over 237.5 million people citing estimated mid year data estimate from Worldometer.
The loan request, submitted on Tuesday, May 27, is aimed at funding key projects in infrastructure, health, education, and water supply. It comprises of
$21.54 billion in U.S. dollars
€2.19 billion, which equals about $2.5 billion
¥15 billion (Japanese Yen), which equals around $102 million
When converted using the official exchange rate of N1,583.74 to $1 (as of the day before the request), the loan adds up to about N38.23 trillion.
Nigeria’s current debt situation
Nigeria’s public debt already stood at N144.67 trillion as of December 31, 2024, according to the Debt Management Office (DMO). Adding the new loan would increase the total to around N182.90 trillion.
What this means for Nigerians
With a population of 237.5 million, every citizen could technically be responsible for about N770,000 of the country’s total debt of N183 trillion.
This is a significant jump from N656,514 per person in September 2024, as reported by The ICIR when the total debt was N142.32 trillion and the population was around 216.78 million.
Tinubu’s latest borrowing has spurred mixed reactions from concerned Nigerians and economic experts, and further generated political undertones.
President’s aide’s clarification
In a Facebook post on Wednesday, May 28, the special adviser to the president on economic affairs, Tope Fasua, described the latest request by his master as not seeking any large borrowings, but that the request was in line with a three-year plan, including for the states.
“The economy is growing, and borrowing is normal. Nigeria is still one of the least borrowed countries around the world and in Africa.
“Our focus is not on borrowing but on growing local capacity, productivity and revenues. The economy is transforming. Stay positive and get productively involved,” he asserted.
What the data shows about Nigeria’s economic growth, productivity
According to the National Bureau of Statistics (NBS), Nigeria’s GDP grew by 3.84 per cent in Q4 2024, and 3.40 per cent overall in 2024, an improvement from 2.74 per cent in 2023.
However, productivity remains a challenge. According to data on labour productivity (measured as GDP per hour worked) is low at $6.8, placing Nigeria 143rd out of 191 countries globally.
For a nation with the 6th largest population in the world, this labour productivity value reflects the disconnect between the country’s large population and its economic performance.
Nigerians react
A Development Economist, Kalu Aja, who spoke on the ballooning debt by the Tinubu administration, queried the lack of accountability in the fuel subsidy removal, stressing that,” If you cannot account for subsidy, you cannot account for borrowing.”
On his part, Laitan Ishola, while reacting to Fasua’s assertion, wants to know what the government use the loan it borrows for as compared to other countries.
“A significant portion of our borrowing is used for recurrent expenditure like salaries and overhead costs, rather than for infrastructure development. A considerable amount is also used to cover existing debt obligations.
“This same loan and bond are meant to settle outstanding national pension liabilities,” he lamented.
Adebowale Yusuf believes that a growing economy with a positive outlook through workable reforms needs good borrowings to transform into a bigger economy that can cater for all the needs of its populace within the shortest possible time.
He imagined that if the loan were used for infrastructure development, it could bring progress to the country.
He asked, “Is that not more revenues, more infrastructures, more employment and low inflation in the long run because of capacity enhancement and efficiency?”
Olagunju Olowu posits that “any foreign loan that is not tailored towards capital projects that have the capacity to yield a return on investment, whether in the short or long term, will lead to the economic crisis.”
Experts position
Experts have repeatedly raised concerns about Nigeria’s debt sustainability and the country’s appetite for borrowing.
They have noted that inadequate infrastructure is hindering productivity, especially in the manufacturing and agricultural sectors.
The chief executive officer of Economy Associates, Ayo Teriba, had told The ICIR that “borrowing is not criminal as the country faces serious infrastructural challenges, but borrowing to pay interest on outstanding debts is wrong.”
Another renowned economist, Muda Yusuf, had said, “We need to be worried about the interest rate we pay on the Eurobond because it is commercial debt and we need to be worried about even the current interest rate on Treasury bills and Federal Government bonds, they are too high. These things impose a lot of pressure on government finances, from the point of view of debt servicing.”
A look at recent figures shows that Nigeria’s debt servicing costs have significantly increased, impacting its fiscal position.
In the first four months of the year, external debt servicing surged by 50 per cent year-on-year, reaching $2.01 billion, according to the Central Bank of Nigeria (CBN).
This increase is attributed to rising global interest rates and the depreciation of the naira, making dollar-denominated debt more expensive.