President Bola Tinubu has requested the National Assembly’s approval for a new external borrowing plan of N1.767 trillion to finance Nigeria’s 2024 budget deficit of N9.7 trillion.
The loan, based on an exchange rate of N800 to $1, was announced on Tuesday during a plenary session, where the Speaker of the House of Representatives, Tajudeen Abbass, read the president’s proposal.
This request follows the Federal Executive Council’s recent approval of a $2.2 billion external borrowing plan to support the 2024 Appropriation Act. If approved, Nigeria’s external debt is projected to climb to $45.1 billion by the end of 2024, up from $42.12 billion recorded in the first quarter of this year.
Debt servicing costs have surged, with the Federal Government spending N3.8 trillion between January and August 2024—an increase of 107.7% over initial budget projections of N1.83 trillion. This alarming rise in expenditure is highlighted in the 2025-2027 Medium Term Expenditure Framework and Fiscal Strategy (MTEF & FSP) released by the Budget Office.
Out of the N7.41 trillion allocated for overall debt servicing—covering domestic debt, foreign debt, sinking funds, and FGN bond interests—N5.51 trillion (34.4% of the total) has already been spent.
The rapid increase in Nigeria’s national debt has become a pressing issue under President Tinubu’s administration. By mid-2024, the country’s public debt soared to N134.2 trillion from N87.3 trillion in June 2023, representing a record rise of N46.9 trillion.
This sharp increase is attributed to extensive borrowing from both domestic and external sources. Domestic debt now stands at N71.2 trillion, while external debt has reached N63 trillion. Additionally, the naira’s devaluation has amplified the local cost of external debt.
Debt servicing remains a major fiscal pressure. In the first half of 2024, Nigeria spent $3.58 billion servicing foreign debt, a nearly 40% increase from 2023. Debt per capita has also risen significantly to N620,000, raising concerns about the country’s economic stability and its capacity to sustain this growing debt burden without jeopardizing future development.
