…Presidency Clarifies Tinubu’s Medium-Term Borrowing Plan
Nigeria’s total debt may soon climb above ₦180 trillion, following President Bola Tinubu’s request to the National Assembly for approval of a borrowing plan covering both foreign and domestic loans worth ₦34.15 trillion.
In separate letters sent to the Senate and House of Representatives, the President asked lawmakers to endorse a borrowing arrangement that includes over $21.5 billion in external loans and a domestic bond of ₦757.9 billion to clear outstanding pension arrears.
The plan, which spans 2025 to 2026, is part of the Medium-Term Expenditure Framework (MTEF), a standard budget planning tool used by governments to outline spending priorities over a few years.
President Tinubu explained that the funds are to be channelled into critical sectors like infrastructure, agriculture, health, education, water supply, security, employment, and economic reform.
“The 2025–2026 borrowing plan covers all sectors, with specific emphasis on infrastructure, agriculture, health, education, water supply, growth, security, and employment generation, as well as financial and monetary reforms, among others,” Tinubu wrote.
He argued that borrowing is necessary due to the wide infrastructure gap and limited resources available to fix it.
“In light of the significant infrastructure deficit in the country and paucity of financial resources needed to address this gap, amid declining domestic demand, it has become essential to pursue prudent economic borrowing to close the financial shortfall,” he said.
The President added that the funds would be used to improve rail transport, healthcare delivery, and development projects across all 36 states and the FCT.
“This initiative aims to generate employment, promote skill acquisition, foster entrepreneurship, reduce poverty, and enhance food security, as well as improve the livelihoods of Nigerians,” he said.
To address mounting pension liabilities under the Contributory Pension Scheme (CPS), Tinubu also sought approval for the issuance of domestic bonds worth ₦757.9 billion.
He noted that financial challenges had prevented the government from fulfilling its pension obligations over the years, leading to growing arrears and hardship among retirees.
“The Senate, House of Representatives are invited to note that the Federal Government has not been compliant with the implementation of the above provisions of the PRA 2014 over the years due to revenue challenges leading to the accumulation of pension arrears with the attendant suffering of retirees,” he wrote.
He further explained that issuing bonds to offset the debt has already been approved by the Federal Executive Council and would help restore trust in the pension system, saying “It will enable the Federal Government of Nigeria meet obligations under the CPS and restore confidence in the pension industry. It will also ensure positive welfare, even for the retirees, as this will enable them to meet their basic needs, improve health and avoid untimely death.”
While the letters sparked public concern that Nigeria was about to take a fresh $20 billion loan all at once, the Presidency has clarified the situation.
In a statement, the Special Adviser to the President on Social Media, Dada Olusegun, said the public had misunderstood the request.
According to Olusegun, “It is important to, very quickly, clear the misconception about the 2025–2026 MTEF funding which some people have now tagged as the president borrowing $20bn lump sum. No, the President is not requesting to borrow $20bn, at least, not like it has been made to sound.”
Olusegun explained that the borrowing plan only outlines what Nigeria, both federal and state governments, may need to borrow over two years. He said it is more efficient to get a broad approval upfront rather than return to the Senate monthly for piecemeal requests.
“It reeks of absolute lack of plan to keep going back to the senate every month to get approval for external borrowings and as such, all planned borrowings (covering all 36 states and the FG) over the next two years have been presented as one to the National Assembly,” the media aide stated.
He also stressed that not all borrowing requests will be fully used, and loans, when properly managed, are not inherently bad. The real issue, he said, should be how such funds are spent.
“Loans in itself, are not bad instruments of financing for public services. What Nigerians must focus on is how such loans are being utilised by the government and if any, these are the questions that should be asked,” Olusegun added.
According to him, part of the plan includes raising $2 billion from the domestic market to support several infrastructure projects, a first of its kind.
He noted that since state governments cannot access foreign loans without federal backing, it was necessary for the National Assembly to approve a consolidated plan.
As of the end of 2024, Nigeria’s public debt had already risen by nearly 49 per cent — from ₦97.34 trillion in 2023 to ₦144.66 trillion. Of this, the Federal Government alone is responsible for ₦137.28 trillion or 95 per cent of the total.
When the fresh loan requests and the ₦10.85 trillion borrowed from January to April 2025 are added, Nigeria’s debt stock is projected to exceed ₦180 trillion.
Also worrying is the government’s debt service-to-revenue ratio, which rose to 131 per cent in the first two months of 2025, meaning the government is now spending more to service debt than it is earning.
The Senate President has referred the borrowing request to the Committee on Local Debts, while the Speaker of the House has handed it to committees on National Planning, Economic Development, and Pensions for review. Both chambers are expected to deliberate on the proposals before giving final approval.
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