Debt Concerns Rise as Senate Fast-Tracks Tinubu’s $6bn Loan, Total Hits N155trn

Nigeria’s debt profile is expected to climb to N155.1 trillion after the Senate approved a $6 billion loan request from President Bola Tinubu in a rapid legislative process that lasted under four hours.

The additional borrowing, calculated at N1,400 per dollar, increases the country’s debt stock from N146.69 trillion at the end of 2025 by N8.4 trillion.

The request, read by Senate President Godswill Akpabio, moved through all legislative stages in a single sitting following a report by the Senate Committee on Local and Foreign Debts chaired by Senator Aliyu Wammakko.

President Tinubu’s proposal includes a $5 billion Total Return Swap financing arrangement with First Abu Dhabi Bank and a $1 billion UK export facility for port rehabilitation.

He said the funds would be used to support budget execution, finance infrastructure, refinance expensive debts and meet urgent financial needs.

“The purpose of this letter is to request… approval… to establish a structured total return swap… of up to $5 billion… which will be made available… in tranches,” the President stated.

The port rehabilitation project, targeting Lagos Port Complex and Tin Can Island Port, is expected to improve efficiency, enhance safety and boost Nigeria’s competitiveness in global trade.

Despite these objectives, analysts warned of significant risks, particularly due to Nigeria’s exposure to foreign currency obligations.

Tunde Abidoye explained that the financing structure could lead to higher costs if the naira weakens.

“If the naira depreciates… the Federal Government will have to pay the bank the difference… Consequently, this carries significant currency risk,” he said.

David Adonri also cautioned against excessive foreign borrowing.

“Financing an economy with external debt is a dangerous proposition… Mounting foreign debt mortgages the future of the country,” he said.

Clifford Egbomeade added that while the port project has economic merit, debt sustainability remains a concern given the country’s fiscal deficit.

Meanwhile, former Vice President Atiku Abubakar strongly criticised the speed of the Senate’s approval.

“What Nigerians have witnessed is not legislative diligence, but a disturbing erosion of oversight responsibility,” he said.

“Where was the debate? Where was the rigorous analysis? Where was the accountability?” he queried, warning that the nation’s future was being “signed away in a matter of hours.”

Atiku emphasised that while borrowing is not inherently wrong, “reckless borrowing, enabled by legislative complacency, is dangerous,” calling for greater transparency and fiscal discipline.

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