Market News
Fresh $24bn loan request May push Nigeria’s public debt to N183trn
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Nigeria’s public debt is set for a significant increase as President Bola Tinubu has formally requested approval from the National Assembly to secure fresh foreign loans totaling approximately $24.14 billion.
At the current official exchange rate of N1,583.74/$1, the proposed borrowing could add about N38.24 trillion to Nigeria’s existing debt profile, potentially pushing the total public debt from N144.67 trillion at the end of 2024 to over N182.91 trillion by 2026.
The new loan request comprises $21.54 billion, €2.19 billion, and ¥15 billion. Converted using prevailing market exchange rates — €1 to $1.1381 and ¥1 to $0.0068 — the euro and yen components are equivalent to roughly $2.5 billion and $102 million respectively, bringing the total to $24.14 billion.
At an official exchange rate of N1,583.7388/$1, the total loan translates to approximately N38.24 trillion in naira terms.
Data from the Debt Management Office (DMO) showed that as of December 31, 2024, Nigeria’s total public debt stood at N144.67 trillion — a 48.58% increase from N97.34 trillion in 2023. This surge was driven by heightened borrowing and the sharp depreciation of the naira against major international currencies.
The weakening naira significantly inflated the naira-equivalent of Nigeria’s external debt, which rose from N38.22 trillion ($42.5 billion) in December 2023 to N70.29 trillion ($45.78 billion) by the end of 2024 — an 83.89% jump.
Domestic debt also grew, climbing from N59.12 trillion to N74.38 trillion during the same period — a 25.77% rise. The Federal Government was responsible for N70.41 trillion of this debt, up from N53.26 trillion. Conversely, subnational borrowings dropped, with debt owed by state governments and the FCT declining from N5.86 trillion to N3.97 trillion.
If approved, the new borrowing will increase Nigeria’s external debt from $45.78 billion to approximately $69.92 billion — a 52.7% rise. In naira terms, this would lift the external debt portion of Nigeria’s total debt stock to over N108 trillion.
Economic experts have raised concerns over the sustainability of Nigeria’s rising debt burden. Speaking on the development, Johnson Chukwu, Group CEO of Cowry Assets Management Limited, cautioned against unchecked borrowing without transparency and measurable outcomes.
According to Chukwu, “The most important thing is what the money is being used for. That’s what Nigerians will be focused on.”
He noted that while borrowing is not inherently negative, its value lies in prudent deployment. “If borrowed funds are invested in assets that generate returns higher than the cost of the loans, then the borrowing is justified,” he said. “But if not, then we are only mortgaging the country’s future.”
