Tinubu Seeks $21.5bn Loan, N758bn Bond to Fund Projects, Settle Pension Arrears Amid Surging Debt and Rising Concerns Over Borrowing for Consumption

President Bola Tinubu officially asked the National Assembly to approve a new wave of loans – consulting $ 21.5 billion in external loans, a broadcast of bonds of 758 billion Nairas and an additional $ 2 billion in domestic loans – to finance critical infrastructure and win long -standing pension stops.

The request, read during the plenary of the Senate on Tuesday, was referred to the Senate Committee of Local and Foreign Debts, which should appear in the two weeks.

In his letter to the Legislative Assembly, President Tinubu explained that the loans proposed were necessary to finance the key sectors of the economy, in particular infrastructure, health, education and water supply. He also requested legislative approval to issue obligations on the internal market worth 757.9 billion Nairas to settle retirement passives in circulation within the framework of the contributory pension plan.

The president said that the request is to allow the federal government to comply with its obligations to retirement officials and to support the implementation of major infrastructure projects that will stimulate growth and job creation.

This is not the first call of this type of Tinubu administration. A separate request was also sent to the House of Representatives requesting the approval of the revised external borrowing plan of 2025-2026. As part of this plan, the government seeks to obtain $ 21.5 billion, 2.2 billion euros, 15 billion yen in Japanese yen and a subsidy of 65 billion euros. The president of the chamber, Tajudeen Abbas, read the letter on the ground and referred it to the Chamber Committee on AIDS, loans and debt management for a more in -depth exam.

Mounting debt profile and use of the arrow debt

The new requests come both that the Nigeria public debt burden increases rapidly, triggering an alarm of economists, financial duty and ordinary citizens.

According to data published by the Debt Management Office (DMO), the total public debt of Nigeria on December 31, 2024, was 144.7 Billions from Nairas (approximately 94.2 billion dollars). From this amount, 74.4 Billions of Nairas are interior debt, while 70.3 billions of Nairas are external.

Even more worrying is the cost of the debt service. In 2023, the country spent 7.8 Billions of Nairas on debt maintenance – more than double the 3.52 Billions of Nairas spent in 2022. This figure climbed 13 billions from Nairas in 2024, reflecting an increase of 68% in a year.

These figures show that Nigeria spends more and more to serve existing loans only on fixed assets. It also signals a deeper structural weakness: the country does not generate enough income to meet its obligations. Analysts warn that such a trend is not sustainable and could erase expenses in critical sectors such as education, health care and infrastructure.

Borrowing for consumption, another concern

Beyond the size of the Nigeria debt, another growing concern is how the funds borrowed are used. Many have long stressed that Nigeria borrows massively to finance recurring expenses or service arrears, rather than creating fixed assets that can stimulate the economy and generate yields.

This concern is not unfounded. The new request for loan from the Tinubu administration includes an internal obligation of 758 billion nairas specifically intended to settle retirement liabilities – a noble gesture alone, but which falls in consumption, not in investment.

A financial expert, Mr. Babatunde Salami, warned federal governments and states against borrowing from the capital market for consumption. In an interview with Von, Salami said that the government at all levels should only borrow for fixed assets whose capital yields would pay the funded fund.

Although the request of President Tinubu has now been submitted to the appropriate legislative committees, it is probably approved, however, several legislators have already expressed their concern about the country’s loan frenzy, in particular without a clear reimbursement plan or a specific transparency.

Senator Ali Ndume (APC, Borno South) earlier this year, said he was concerned that the government borrows for consumption.

Ndume said: “Let me say that I am not against the loan, America, Japan, China and other large countries borrow.

“They (Nigerian government) borrow for tax projects, tangible and responsible, which they reimburse over time. But my concern is what they borrow. ”

If it is approved, the proposed loans will push the total public debt of Nigeria beyond the 15 billion nairas mark. And with debt service costs already consuming a significant part of government income, concerns remain on how the administration intends to manage long -term budgetary stability.