Many Nigerians have continued to express concern over the Federal Government’s rising borrowing levels, despite official claims that national revenue generation has improved.
The News Agency of Nigeria reports that the National Assembly recently approved President Bola Tinubu’s request to borrow N1.15 trillion from the domestic debt market to finance part of the 2025 budget deficit.
Lawmakers noted that the 2025 budget includes a total expenditure of N59.99 trillion, up from the N54.74 trillion initially proposed by the executive, creating a deficit of N14.10 trillion. Of this amount, N12.95 trillion has already been approved for borrowing.
According to data from the Debt Management Office , Nigeria’s total public debt stood at N152.4 trillion as of June—comprising N71.85 trillion external debt and N80.55 trillion domestic debt.
Chairman of the Senate Committee on Appropriations, Senator Olamilekan Adeola said most of the loan requests were already captured in the Medium-Term Expenditure Framework and the 2025 budget.
“The borrowing is already embedded in the 2025 Appropriation Act. With this approval, we now have all revenue sources, including loans, in place to fully fund the budget,” Adeola said.
Similarly, Chairman of the Senate Committee on Finance, Senator Sani Musa, defended the borrowing plan, saying it aligns with global practices.
“There is no economy that grows without borrowing. What we are doing is in line with global best practices,” Musa stated.
However, Senator Abdul Ningi said Nigerians deserve clearer details about the loans and their intended impact on the economy.
Economic experts have cautioned that Nigeria’s rising borrowing could worsen the country’s debt service obligations.
Dr. Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise, said Nigeria’s debt service cost is now outpacing capital expenditure.
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He warned that the country could be spending beyond its means, with over 80 per cent of government revenue already devoted to servicing debt.
“Debt service is already far more than the appropriation for capital spending, and the trend is worrying. We need to tread very cautiously with respect to debt commitments,” Yusuf said.
He added that Nigeria is borrowing largely to finance consumption and recurrent expenditure rather than productive, revenue-generating capital projects.
“This path will only deepen the fiscal crisis if urgent reforms are not undertaken,” he said.
Deputy Country Director at BudgIT, Vahyala Kwaga, also warned that the latest borrowing plans could push Nigeria closer to breaching its debt sustainability threshold. He stressed the need for greater transparency regarding how previous loans were utilized.
Bismarck Rewane, CEO of Financial Derivatives Company, said increased domestic borrowing poses risks to the private sector. He noted that the government’s rising demand for local debt instruments could push interest rates upward, crowd out private investment, and trigger further inflation.
Despite public concern, the DMO maintains that Nigeria’s debt profile is still within safe limits.
Speaking at the recent Nigerian Economic Summit in Abuja, DMO Director-General Patience Oniha said Nigeria’s debt-to-GDP ratio currently stands at about 40 per cent, well below the 70 per cent benchmark for emerging economies.
According to Oniha, although anxiety about rising borrowing levels is understandable, Nigeria’s debt remains moderate by international standards.
