NIGERIA ON BORROWED TIME: TINUBU’S FRESH MULTIBILLION-DOLLAR LOAN REQUEST AND THE DANGER OF MORTGAGING OUR FUTURE

By Destiny Tamunoala Emmanuel

Nigeria may be approaching another defining moment in its economic history as President Bola Ahmed Tinubu’s reported request for National Assembly approval of approximately $20.52 billion and €1.04 billion in external loans raises fresh concerns about the country’s debt profile, fiscal sustainability and the future of its economy.

The proposal has reignited a fundamental question about Nigeria’s economic direction: can a nation continue to accumulate foreign debt in the name of development without sufficiently demonstrating how such borrowing will translate into improved living standards, increased productivity and sustainable economic growth?

For a country battling high living costs, unemployment, insecurity, inadequate electricity supply, deteriorating infrastructure and widespread economic hardship, the prospect of another substantial borrowing commitment demands rigorous scrutiny.

Although borrowing can provide essential financing for infrastructure and other development priorities, the circumstances surrounding Nigeria’s existing debt obligations make it imperative for the Federal Government to demonstrate that the proposed loans are necessary, affordable and capable of delivering measurable benefits.

The concern is not that Nigeria should never borrow. Rather, it is that borrowing must serve as an instrument of economic transformation and not become a permanent substitute for sound fiscal management, effective governance and productive investment.

Nigeria cannot borrow its way into lasting prosperity without building the economic capacity to repay its debts.

THE GROWING WEIGHT OF NIGERIA’S DEBT

Nigeria’s public debt has expanded considerably over the years as successive administrations have borrowed to finance infrastructure, budget deficits and other government obligations.

The Debt Management Office reported that Nigeria’s total public debt stood at approximately ₦159.35 trillion as of March 31, 2026, covering the obligations of the Federal Government, state governments and the Federal Capital Territory.

The scale of these obligations raises important questions about the country's capacity to meet its repayment commitments while continuing to finance essential public services.

Public debt, in itself, is not necessarily evidence of economic failure. Governments borrow to finance long-term infrastructure, support development programmes and respond to extraordinary economic pressures. When borrowing is properly structured and invested in productive assets, its benefits can extend across generations.

However, the sustainability of debt depends not only on how much a country owes but also on its ability to generate sufficient revenue to service its obligations without undermining economic development.

Nigeria’s major challenge lies in the relationship between its debt burden and its revenue-generating capacity.

The government must finance debt servicing alongside security, healthcare, education, roads, electricity, public administration and other competing national priorities. When debt obligations consume an increasingly significant proportion of available revenue, the resources remaining for these essential responsibilities become constrained.

The danger is that additional borrowing could intensify this pressure if it does not generate sufficient economic returns.

Nigeria must therefore look beyond the amount of money it can secure from international lenders and focus on whether the country can comfortably repay its obligations while meeting the needs of its citizens.

WHAT HAS NIGERIA GAINED FROM PREVIOUS BORROWINGS?

One of the most important questions surrounding the proposed loans concerns the tangible results of previous borrowing programmes.

Successive Nigerian administrations have secured substantial financing for roads, railways, power infrastructure, agriculture, healthcare, education and other development projects.

Some of these investments have delivered valuable infrastructure and economic benefits. Nevertheless, the existence of completed projects does not eliminate the need for a comprehensive assessment of how public borrowing has contributed to national development.

Nigerians deserve to know which projects have been completed, which remain unfinished, how much was spent, whether the original objectives were achieved and what economic benefits have resulted.

Where loans were secured to improve electricity supply, the public should be able to assess the improvements attributable to those investments. Where financing was provided for transportation, government should demonstrate how the projects have improved mobility, reduced logistics costs and strengthened commerce.

Similarly, agricultural loans should be evaluated against measurable improvements in food production, storage, processing, distribution and farmers’ incomes.

These questions are necessary because loan approval does not automatically translate into development.

A government may secure billions of dollars for infrastructure, but if projects remain incomplete, costs escalate without adequate justification or the expected economic benefits fail to materialise, the country may be left with substantial repayment obligations without receiving corresponding value.

The Federal Government should therefore publish a comprehensive account of previous borrowings, including their utilisation, project status, outstanding obligations and measurable outcomes.

Such an assessment would provide a stronger foundation for determining whether another major borrowing programme is justified.

The Nigerian people should not be expected to accept successive borrowing commitments without clear evidence of what previous financial obligations have achieved.

SUBSIDY REMOVAL AND ECONOMIC REFORMS: WHERE ARE THE RESULTS?

The debate over fresh external borrowing becomes more significant when considered alongside the economic reforms introduced by the Tinubu administration.

The removal of petrol subsidies and changes to foreign-exchange arrangements were presented as necessary measures to address structural weaknesses, improve public finances and establish a foundation for sustainable economic growth.

However, these reforms have also placed substantial pressure on households and businesses, particularly through higher transportation costs, rising prices and the increased cost of production.

Nigerians have been asked to endure difficult adjustments in anticipation of long-term economic benefits. The government must therefore demonstrate how these sacrifices are translating into improved public finances, stronger productive capacity and better living conditions.

If subsidy removal and revenue reforms are intended to reduce fiscal pressures, the public deserves a transparent account of the savings and additional revenues generated, how the resources have been allocated and what benefits citizens have received.

It would be inaccurate to assume that every naira saved through subsidy removal is available exclusively to the Federal Government, since such resources are distributed across different tiers of government and compete with numerous expenditure obligations.

Nevertheless, the overall fiscal impact of these reforms should be clearly documented.

The government must explain why additional foreign borrowing remains necessary, identify the expenditure requirements that cannot be met through existing revenue and demonstrate that wasteful spending and revenue leakages are being addressed.

Economic reforms cannot be judged solely by the policies announced or the financial adjustments imposed on citizens. Their ultimate value must be measured by the improvements they produce.

If Nigerians continue to experience severe economic hardship while government borrowing expands, public confidence will inevitably be tested.

The responsibility of the Federal Government is to show that the sacrifices being demanded from citizens are contributing to a credible and sustainable recovery.

THE FOREIGN-EXCHANGE RISK THAT COULD MAKE DEBT MORE EXPENSIVE

One of the greatest risks associated with external borrowing is the possibility that changes in the exchange rate could increase the domestic cost of servicing foreign-denominated obligations.

Loans denominated in dollars and euros must generally be repaid in the currencies specified in their agreements. However, much of the government’s domestic revenue is collected in naira.

This creates a financial vulnerability whenever the naira weakens against the currencies in which the loans are denominated.

For instance, a dollar-denominated obligation worth $1 billion would have a naira equivalent of ₦1.4 trillion at an exchange rate of ₦1,400 to the dollar. If the exchange rate subsequently moved to ₦1,800 to the dollar, the same principal would be equivalent to ₦1.8 trillion.

The dollar obligation would remain unchanged, but its naira equivalent would increase by ₦400 billion, before considering interest or repayments.

This illustrates why the government must carefully assess the foreign-exchange implications of every proposed external loan.

Nigeria earns foreign exchange through oil and gas exports, non-oil exports and other international economic activities. Investments that expand export earnings, strengthen domestic manufacturing and reduce dependence on imports can help improve the country's ability to meet foreign-currency obligations.

However, where borrowed money fails to generate sufficient economic returns or strengthen the country’s foreign-exchange earning capacity, repayment could become increasingly difficult as exchange-rate pressures intensify.

The government must therefore disclose the currency composition, interest rates, maturity periods, grace periods and repayment arrangements associated with the proposed facilities.

The critical consideration should not be merely whether international lenders are willing to provide the money, but whether the country can meet the obligations under realistic economic conditions.

BORROWING WITHOUT PRODUCTIVITY COULD BECOME A VICIOUS CYCLE

Nigeria’s economic future depends on its ability to transform its abundant natural resources, agricultural potential, entrepreneurial energy and human capital into sustainable productivity.

Borrowing can support this transformation when it finances infrastructure and industries capable of generating long-term economic value.

A reliable electricity system can reduce production costs and help businesses expand. Efficient transportation networks can improve the movement of goods and people. Modern agricultural infrastructure can increase food production, reduce post-harvest losses and strengthen rural incomes.

These investments can stimulate economic activity, create employment and broaden the government’s revenue base.

The problem emerges when borrowing becomes disconnected from measurable productivity.

If a country repeatedly borrows to finance projects that fail to generate adequate economic returns, its liabilities may increase faster than its capacity to repay them.

The government could then find itself borrowing again to meet expenditure pressures created partly by previous obligations.

This creates a dangerous cycle in which new loans provide temporary financial relief without resolving the structural weaknesses that make additional borrowing necessary.

Nigeria must avoid such a trajectory.

Every proposed loan should be assessed against clear economic objectives, credible implementation plans and measurable performance indicators.

The government should identify the expected benefits of each project, the timeline for delivery, the responsible implementing agency and the mechanisms for monitoring expenditure.

Independent assessments should determine whether the expected returns justify the financial commitments, while transparent procurement processes should help reduce the risk of inflated contracts, abandoned projects and the diversion of public funds.

Without these safeguards, Nigeria risks accumulating debt without achieving the economic transformation that borrowing is supposed to support.

THE NATIONAL ASSEMBLY MUST RISE ABOVE ROUTINE APPROVALS

The National Assembly now has a critical responsibility to scrutinise the proposed borrowing request in the national interest.

The Senate and House of Representatives must recognise that decisions concerning public debt can affect government budgets and the economic opportunities available to Nigerians long after the present administration has left office.

Their constitutional responsibility requires more than receiving presidential submissions and processing them through routine legislative procedures.

The lawmakers must demand detailed information on the purpose of the loans, the projects to be financed, the conditions attached to the facilities and the arrangements for repayment.

They should also insist on an independent assessment of the implications for Nigeria’s debt sustainability, including the potential effects of exchange-rate movements, weaker-than-expected revenue and changes in financing costs.

Another important consideration is whether the proposed borrowing overlaps with previously approved financing programmes or includes commitments that have already been accounted for elsewhere.

The government must provide sufficient documentation to establish the precise amount of genuinely new borrowing and explain how the proposed facilities fit into the country’s overall debt-management strategy.

Legislators should also demand enforceable mechanisms for tracking disbursements, monitoring project implementation and publishing regular reports on the use of borrowed funds.

Where the economic justification is inadequate, the National Assembly should insist on revisions, defer consideration or reject the proposal.

This is not an argument for automatically opposing every presidential request. Rather, it is a call for the legislature to demonstrate that its decisions are guided by evidence, public interest and long-term national considerations.

The National Assembly was established as an independent arm of government, with responsibilities that include legislative scrutiny and oversight. Its credibility depends on its willingness to exercise those responsibilities even when doing so requires difficult questions or disagreement with the executive.

The Nigerian people deserve a legislature that interrogates before endorsing and scrutinises before approving.

THE 2027 ELECTIONS AND THE NEED FOR EXCEPTIONAL TRANSPARENCY

The timing of the proposed borrowing also deserves careful consideration as Nigeria approaches the 2027 general elections.

The proximity of an election does not establish that a borrowing proposal is politically motivated. Nigeria’s infrastructure and development needs remain substantial regardless of the political calendar.

However, major financial commitments made during a politically sensitive period require particularly strong safeguards.

Public projects may take years to complete, while announcements of new financing can produce immediate political attention. This makes it essential to distinguish between the announcement of a project and the actual delivery of its benefits.

The Federal Government must provide clear information on the implementation schedules, procurement arrangements and expected outcomes of projects proposed for financing.

The National Assembly should ensure that borrowing decisions are based on economic necessity rather than political convenience, while relevant oversight institutions should monitor implementation and expenditure.

The public must be able to determine whether proposed projects are realistic, affordable and capable of delivering lasting benefits.

Ultimately, the country's financial future must not be subordinated to the immediate interests of any political administration.

FUTURE GENERATIONS MUST NOT INHERIT DEBT WITHOUT BENEFITS

Perhaps the most troubling implication of excessive or poorly managed borrowing is the burden it can impose on future generations.

Loans contracted today may require repayment over many years, placing demands on the revenue of administrations that had no role in negotiating the original agreements.

Future citizens may therefore inherit financial obligations arising from decisions made before they entered the political and economic system.

This is not necessarily unjust. When borrowing finances productive infrastructure that serves the country for decades, future generations can reasonably share the repayment costs because they also benefit from the investments.

The problem arises when future citizens inherit the debt without receiving the promised economic value.

If borrowed money is wasted, projects remain unfinished or investments fail to improve productivity, the financial obligations may survive long after the anticipated benefits have disappeared.

The result could be a generation facing inadequate employment opportunities, poor infrastructure and constrained public services while also carrying the cost of previous borrowing decisions.

Nigeria must avoid creating such an inheritance.

Public borrowing should be guided by intergenerational responsibility, ensuring that financial obligations incurred today contribute to a stronger and more prosperous country tomorrow.

The government must demonstrate that the proposed loans will leave the country with productive assets, improved services and greater economic capacity rather than merely expanding its repayment commitments.

NIGERIA NEEDS A PRODUCTIVITY REVOLUTION, NOT PERPETUAL BORROWING

The alternative to poorly justified borrowing is not to abandon development financing altogether. It is to build an economy capable of generating more of the resources required for its own development.

Nigeria must improve revenue collection, reduce financial leakages, strengthen public institutions and ensure that government expenditure delivers measurable value.

Tax administration should become more efficient and equitable, with particular attention to compliance, transparency and the reduction of avoidable revenue losses. Such reforms should not simply shift additional burdens onto struggling households and businesses.

Government must also prioritise investments that reduce the cost of production, improve infrastructure and expand economic opportunities.

Reliable electricity, efficient transport systems, agricultural modernisation, industrial development and stronger export capacity are essential to building a productive economy.

Nigeria's dependence on oil revenue exposes public finances to fluctuations in international markets. Expanding non-oil exports, supporting competitive industries and improving domestic production would strengthen the country's revenue base and foreign-exchange earning capacity.

Agriculture, manufacturing, technology, creative industries and other productive sectors offer significant opportunities, provided that investment is supported by infrastructure, security, skills development and consistent economic policies.

Government must also review expenditure priorities and eliminate wasteful spending wherever it is established. Fiscal discipline should mean more than borrowing less; it should mean spending available resources wisely and ensuring that public institutions are accountable for results.

Private investment and public-private partnerships may also contribute to infrastructure development where they offer genuine value for money and do not create hidden or excessive liabilities for taxpayers.

These measures will not remove the need for borrowing entirely. They will, however, help ensure that borrowing supports a stronger economy rather than becoming a permanent response to weaknesses in public finance.

IS NIGERIA ALREADY IN A DEBT TRAP?

Although the country's debt burden raises serious concerns, it is important to distinguish between the risk of unsustainable borrowing and a definitive conclusion that Nigeria is already unable to meet its obligations.

Debt sustainability depends on economic growth, government revenue, interest rates, exchange-rate movements, repayment schedules and the returns generated by public investment.

A country may maintain a manageable debt-to-GDP ratio while still experiencing significant fiscal pressure if its revenue base is weak and debt servicing consumes a large proportion of available income.

Conversely, a country that borrows to finance productive infrastructure may strengthen its long-term ability to meet its obligations.

The critical issue is therefore not simply the volume of debt but whether Nigeria's economy and public finances can support the obligations being accumulated.

The government should publish realistic assessments of how the proposed loans would affect future budgets under different economic conditions, including scenarios involving weaker revenue, exchange-rate depreciation and higher financing costs.

It must also explain how essential public services would be protected if revenue projections fall short.

These assessments are necessary to identify risks before they become more difficult and expensive to manage.

Nigeria should not wait for a fiscal crisis before taking debt sustainability seriously.

CONCLUSION: ENOUGH OF BORROWING WITHOUT CLEARLY DEMONSTRATED RESULTS

The reported request by President Tinubu for another $20.52 billion and €1.04 billion in external loans presents Nigeria with an important test of economic responsibility and institutional accountability.

The country unquestionably needs infrastructure, industrial development, improved public services and an economy capable of providing meaningful opportunities for its citizens.

However, these needs cannot justify every borrowing proposal regardless of its cost, structure or expected returns.

The Federal Government must provide a comprehensive account of previous borrowings, demonstrate the necessity of the proposed financing and establish how the new obligations will contribute to measurable economic improvements.

The National Assembly must subject the request to rigorous scrutiny and refuse to treat legislative approval as a routine formality.

Nigerians have endured difficult economic adjustments in anticipation of improved public finances and a stronger economy. They deserve to know how these reforms are working, what resources they have generated and why additional borrowing remains necessary.

The country's leaders must recognise that national prosperity is not measured by the amount of credit a government can obtain but by the value it creates, the opportunities it provides and the quality of life it secures for its people.

Nigeria cannot continue to accumulate financial obligations without demonstrating corresponding improvements in productivity, employment, infrastructure and public welfare.

A nation may borrow to build its future, but it must never mortgage that future without a convincing plan for repayment and development.

The National Assembly must interrogate before endorsing, scrutinise before approving and insist on transparency before committing future budgets to substantial new obligations.

If the proposed loans are economically justified, affordable and capable of delivering lasting benefits, the government should have no difficulty presenting the evidence. If the justification is inadequate, the lawmakers must have the courage to demand a better proposal or reject it.

Nigeria needs leaders who understand that public borrowing is a responsibility, not an achievement in itself.

The country needs a productivity revolution, stronger institutions, responsible public spending and a development strategy that places citizens at the centre of economic decision-making.

Above all, Nigerians need assurance that the sacrifices they are making today will not become an endless burden inherited by their children.

If borrowing alone were the measure of economic progress, Nigeria would have become one of the world's most prosperous nations long ago. The real measure of progress is whether the country is becoming more productive, more competitive, more secure and more capable of meeting its obligations while improving the welfare of its citizens.

Nigeria cannot borrow its way into prosperity without building the capacity to sustain it.

The time has come to replace perpetual borrowing with measurable development, financial accountability and a clear commitment to the future of the Nigerian people.

God bless Nigeria, and may our leaders find the wisdom to understand that the future of a nation is not an overdraft facility.

Destiny Tamunoala Emmanuel