By John Umeh
The Federal Government of Nigeria has unveiled plans to secure an additional $24 billion in loans, a move that could escalate the country’s total public debt stock to an estimated N183 trillion. This proposed borrowing has sparked renewed concerns among economists, civil society organizations, and the general public about Nigeria’s growing reliance on debt financing and its long-term implications for economic stability.
The Borrowing Plan
According to recent disclosures by government officials, the proposed $24 billion loan is part of a broader financing strategy to bridge the fiscal deficit, fund critical infrastructure, and meet recurring obligations. The government argues that borrowing remains necessary to drive national development, especially in the face of dwindling oil revenues, exchange rate volatility, and rising domestic demands.
The new borrowing plan includes both foreign and domestic components. Officials indicate that a significant portion will be sourced through multilateral institutions such as the World Bank, African Development Bank (AfDB), and other international lenders with relatively favorable interest rates.
Mounting Debt Profile
Nigeria’s debt profile has been on an upward trajectory in recent years. As of December 2024, the country’s total public debt stood at N97.34 trillion, according to the Debt Management Office (DMO). The additional $24 billion (approximately N36 trillion at current exchange rates) would push this figure to nearly N183 trillion when factoring in ongoing borrowings and projected interest accruals.
This rapid debt accumulation raises critical questions about sustainability. Nigeria currently spends a large portion of its revenue on debt servicing. The DMO previously reported that over 70% of government revenues in some quarters are used to repay debts, leaving limited funds for capital projects, healthcare, education, and social welfare.
Economic Implications
Economic analysts warn that continued borrowing without commensurate growth in productivity and revenue generation could plunge the country into a debt trap. They emphasize that while borrowing for productive investments is justifiable, the lack of transparency and accountability in how previous loans were utilized remains a red flag.
Moreover, the exchange rate pressures have increased the cost of external debts. With the naira’s continued depreciation, repayment obligations in foreign currencies could further strain the national treasury.
Public Reactions and Calls for Accountability
Reactions to the borrowing plan have been mixed. While some stakeholders acknowledge the infrastructural deficits Nigeria faces, others argue that the government must prioritize cutting waste, boosting tax collection efficiency, and curbing corruption before resorting to more loans.
Civil society groups have called on the National Assembly to scrutinize the loan requests thoroughly and demand comprehensive project details tied to the borrowings. They stress the need for a clear repayment strategy and public disclosure of loan terms to ensure fiscal discipline and protect future generations from excessive debt burdens.
Nigeria stands at a critical fiscal crossroads. As the government pursues a fresh $24 billion borrowing plan that may balloon the national debt to N183 trillion, there is a growing need for prudent fiscal management, increased revenue diversification, and transparent governance. While borrowing can be a tool for economic development, its long-term success depends on how effectively the funds are managed and the extent to which they contribute to sustainable growth.
