Again Tinubu Requests For $21.5bn Loan: What This Means For Nigeria

President Bola Tinubu has formally asked the National Assembly to approve a $21.5 billion external loan and a ₦758 billion domestic bond to help finance key national projects and settle pension arrears.

The loan request, which focuses on boosting sectors like infrastructure, health, education, and water supply, was read during the Senate plenary session on 27th May, 2025. It has been forwarded to the Senate Committee on Local and Foreign Debts, which is expected to submit its report within two weeks.

In another request, President Tinubu asked the Senate to authorise the issuance of Federal Government bonds in the domestic market to clear outstanding pension liabilities under the Contributory Pension Scheme.

The proposed bond issuance is worth ₦757.9 billion. As stated in the President’s letter, the funds aim to settle longstanding pension backlogs and reinforce the government’s commitment to retired public servants.

The President also requested Senate approval to raise $2 billion locally to fund investment in critical sectors. This request has also been sent to the Committee on Local and Foreign Debts, which will report back within two weeks.

Earlier, President Tinubu wrote to the House of Representatives to seek approval for a revised 2025–2026 external borrowing plan. The plan outlines the intention to borrow $21.5 billion, €2.2 billion, ¥15 billion in Japanese yen, and a €65 billion grant.

What Does It Mean For Nigerian Economy?

Economists have expressed concerns about debt sustainability following President Bola Tinubu’s request to the National Assembly for approval to secure about $24bn in external borrowing.

If the National Assembly approves the full amount, Nigeria’s external debt would rise from $45.78bn to approximately $69.92bn—an increase of $24.14bn, which represents a 52.7 per cent jump. In naira terms, this would raise the external debt component of Nigeria’s total public debt to over ₦108tn.

Infrastructural Development And Economic Reforms Support

The borrowed funds are intended to finance critical infrastructure projects, such as the Lagos-Calabar Coastal Highway, aiming to enhance connectivity and stimulate economic growth.

The loans are also aimed at supporting ongoing economic reforms, including the removal of fuel subsidies and currency devaluation, which are designed to stabilize the economy and attract foreign investment .

The Downsides Of This Loan

They caution that while the proposed borrowing could provide necessary funds for infrastructure and support economic reforms, the country’s growing debt burden is edging it closer to a fiscal cliff. 

Economists also stressed the need for transparency and efficient use of the funds. Prudent management and clear accountability are essential to ensure that the borrowed resources deliver real and measurable benefits to Nigeria’s economy and its people.

Already, debt servicing takes up a large portion of government revenue, leaving limited funds for essential services such as healthcare, education, and security.

With oil production falling below budget projections and resulting in massive revenue losses, critics are beginning to question whether the government’s continued borrowing is only delaying a more serious financial crisis.