Nigeria’s total public debt is projected to rise to N155.1 trillion following the approval of a fresh $6 billion external loan requested by Bola Ahmed Tinubu and swiftly passed by the Nigerian Senate.
The new loan, calculated at an exchange rate of N1,400 to the dollar, will add N8.4 trillion to the country’s existing debt stock of N146.69 trillion as of the end of 2025.
The Senate approved the request within hours after Senate President Godswill Akpabio read the President’s letter on the floor. The proposal moved through first, second and third readings and was passed the same day.
The approval followed the consideration of a report presented by Aliyu Wamakko, Chairman of the Senate Committee on Local and Foreign Debts, who outlined the structure of the financing.
According to Wamakko, the facility is designed as a Total Return Swap under International Swaps and Derivatives Association rules, allowing access to up to $5 billion in tranches, with additional funding tied to port rehabilitation. The arrangement is backed by naira-denominated Federal Government securities, with provisions for margin calls in dollars if exchange rates fluctuate.
He warned that the structure carries significant exchange rate risks, noting that any depreciation of the naira would increase the cost of servicing the loan and could worsen Nigeria’s debt service-to-revenue ratio, already projected at about 60 per cent by the end of 2025.
Reacting to the development, former Vice President Atiku Abubakar criticised the speed of the approval, describing it as unusually rapid for a major borrowing decision.
Economic analysts also raised concerns over the growing reliance on external debt. David Adonri of High Cap Securities cautioned that excessive foreign borrowing could expose the country to volatile currency risks and strain future repayment capacity.
Similarly, economic expert Clifford Egbomeade said the loan should be viewed within the context of the 2026 fiscal framework, which projects a budget of N58.18 trillion against expected revenue of N34.33 trillion, leaving a deficit of N23.85 trillion.
He noted that while part of the borrowing earmarked for port rehabilitation could improve trade efficiency and boost revenue, the broader concern remains debt sustainability. External loans, he explained, must be repaid in foreign currency, making them vulnerable to exchange rate fluctuations.
Egbomeade added that if projected revenues underperform, Nigeria’s fiscal space could tighten further, stressing that the long-term impact of the borrowing will depend on whether the investments translate into measurable economic gains.
