Nigeria’s debts to hit N155trn as Senate approves FG’s $6bn loan request

 

Nigeria’s total public debt is expected to increase to about N155.1 trillion after an extra $6 billion loan requested by President Bola Tinubu was quickly approved by the Senate yesterday.

The $6 billion loan, calculated at an exchange rate of N1,400 to one dollar, will add about N8.4 trillion to the country’s existing debt. This raises the total from N146.69 trillion recorded at the end of 2025 to N155.1 trillion.

Experts have warned that taking this new loan carries serious foreign exchange risks. They also said it could worsen the government’s debt service-to-revenue ratio, which is projected to reach around 60 percent by the end of 2025.

The Senate approved the loan in less than four hours after the Senate President, Godswill Akpabio, read the President’s request letter during plenary.

Former Vice President Atiku Abubakar criticised the National Assembly, describing the approval as rushed and too fast for such a major financial decision.

The process followed all legislative stages—first reading, second reading, and third reading—and was completed and passed on the same day.

The Senate gave its approval after reviewing a report presented by Aliyu Wammakko, who chairs the Senate Committee on Local and Foreign Debts.

Tinubu’s requests

President Tinubu submitted two separate letters to the Senate, asking for approval to borrow the $6 billion.

In one request, he asked for approval to create a financial arrangement known as a Total Return Swap (TRS), worth up to $5 billion, with First Abu Dhabi Bank in the United Arab Emirates. This arrangement allows Nigeria to access funds in stages rather than all at once.

The President explained that the money would be used for implementing the national budget, funding key infrastructure projects, and paying off more expensive existing debts. He also noted that it would help the government meet urgent financial needs when necessary.

Tinubu added that Nigeria’s total public debt stood at about $110.3 billion (around N159.2 trillion) as of December 31, 2025, and that the new loan would be drawn gradually to reduce immediate pressure.

In the second request, he asked for approval for a $1 billion loan from the United Kingdom, arranged by Citibank in London. This loan is meant for repairing and upgrading Lagos Port and Tin Can Island Port, which are currently in poor condition.

According to him, improving these ports will boost efficiency, enhance safety, and help Nigeria compete better in global trade, especially in non-oil sectors.

Immediate committee oversight

After receiving the request, Akpabio directed the Senate Committee on Local and Foreign Debts to review it and report back quickly.

Presenting the committee’s findings, Wammakko explained that the financing structure allows Nigeria to access funds in parts, helping to manage financial pressure. The loan will be backed by government securities, and its value will be monitored regularly to manage risks.

The loan will last for six years, with flexible terms that allow adjustments. Interest rates are considered competitive compared to other international borrowing options.

The committee said the funds would be used for budget support, infrastructure development, refinancing costly debts, and handling urgent financial needs. About 40 percent of the money will go into capital projects in the 2025 and 2026 budgets.

While the committee noted some benefits, it also acknowledged risks. These include exchange rate fluctuations, which could increase repayment costs, and market risks related to the value of government securities used as collateral.

Overall, the new borrowing is expected to increase Nigeria’s total debt, even though officials argue that the structure is designed to manage the financial impact over time.