Many Nigerians have continued to raise concerns over the federal government’s borrowing spree despite claims that revenue generation has increased. The National Assembly recently approved President Bola Tinubu’s request to borrow N1.15 trillion from the domestic debt market to finance the 2025 budget deficit. The legislators said the 2025 budget provided for total expenditure of N59.99 trillion, an increase of N5.25 trillion from the initial N54.74 trillion proposed by the executive. They said the expansion created a total budget deficit of N14.10 trillion, out of which N12.95 trillion had already been approved for borrowing. Data from the Debt Management Office (DMO) showed that as of June, Nigeria’s total public debt stood at N152.4 trillion, comprising N71.85 trillion in external debt and N80.55 trillion in domestic debt. The chairman of the Senate Committee on Appropriations, Olamilekan Adeola, said most of the loan requests had already been factored into the Medium-Term Expenditure Framework and the 2025 budget.
The chairman of the Senate Committee on Finance, Sani Musa, said the borrowings align with global economic practices. However, Senator Abdul Ningi said that Nigerians deserve to know the specifics of the loans and their intended impact. Some experts said Nigeria’s debt service burden could worsen due to the new borrowing plans. The chief executive officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, said Nigeria’s rising debt service burden was already outpacing capital expenditure. Mr Yusuf said that it could begin to crowd out essential government functions if not properly managed. He said there was a need for the government to focus more on revenue growth and fiscal consolidation than piling on new debts.
“Debt service is already far more than the appropriation for capital spending, and the trend is worrying. We need to tread very cautiously with respect to debt commitments,” he said. Mr Yusuf said Nigeria was spending far beyond its means, with more than 80 per cent of government revenue now devoted to debt servicing. “This path will only deepen the fiscal crisis if urgent reforms are not undertaken,” he said. The deputy country director at BudgIT, Vahyala Kwaga, stated that the federal government’s plan to take on new loans risks breaching Nigeria’s debt threshold. Mr Kwaga said the government needed to demonstrate far more transparency and accountability on how it had expended previous debts. The chief executive officer of Financial Derivatives Company, Bismarck Rewane, said that increased domestic borrowing could crowd out private investment. According to Mr Rewane, the government’s rising appetite for local debt will push up interest rates and reduce access to credit for businesses, as well as fuel inflationary pressures.
Meanwhile, the DMO said Nigeria’s public debt remained sustainable. Speaking at a recent Nigerian Economic Summit in Abuja, the director-general of the DMO, Patience Oniha, said the country’s debt-to-gross domestic product ratio was currently about 40 per cent. Ms Oniha said it was well below the 70 per cent international benchmark for emerging economies. According to her, despite growing public concern about Nigeria’s debt profile, the country’s borrowing level is not excessive by global standards. NAN
Nigerians raise concern over rising debt amid improved revenue claims
