Nigeria's debt approaches ₦180 trillion as Tinubu pursues a new ₦34 trillion loa

The proposed increase in Nigeria's debt by ₦34.15 trillion, if approved, would bring the country's total public debt to approximately ₦180 trillion. This new borrowing would include $21.5 billion in external loans and a ₦757.9 billion domestic bond to address pension arrears.

President Bola Tinubu's administration justifies the move by highlighting its focus on critical sectors such as infrastructure, health, education, and agriculture, which are areas that require substantial investment to boost economic growth and improve the quality of life for citizens.

However, the decision to seek additional loans comes at a time when debt service costs are already at 131% of the country's revenue, which suggests that the government is spending more on debt servicing than it is generating from its income sources. This is a concerning trend that can lead to increased fiscal pressure on the economy.

Experts have cautioned that while borrowing can be an essential tool for development, it must be done responsibly and with a clear plan for debt sustainability. They emphasize the need for transparency in how the funds will be utilized to ensure that the borrowed money is invested in projects that will generate sufficient returns to pay off the debts. There is also a growing concern that the continued reliance on debt to fund the government's budget could lead to a debt crisis, especially if the economy does not perform well enough to meet the debt servicing obligations.

The government will need to balance the need for borrowing with efforts to diversify the economy and increase non-oil revenue streams to reduce dependence on borrowing. Additionally, there should be a strategic approach to managing debt and ensuring that the funds are used efficiently and effectively to develop the country's infrastructure and improve public services without overburdening future generations with excessive debt. It is crucial that the National Assembly thoroughly scrutinizes the proposed borrowing plan and considers the long-term implications for the nation's fiscal health before granting approval.