The Nigerian Senate has officially approved President Bola Tinubu’s ambitious external borrowing plan of $21.5 billion for the 2025–2026 fiscal period. The approval followed the submission of a report by the Senate Committee on Local and Foreign Debts, presented during plenary on Tuesday by the committee’s chairman, Senator Aliyu Wamakko.

In addition to the external loan request, the Senate also endorsed several other financing proposals. These include a loan of 15 billion Japanese Yen, a €65 million grant, and the issuance of a N757 billion Federal Government Bond to settle accrued rights pension arrears under the Contributory Pension Scheme (CPS) as of December 2023.

Moreover, President Tinubu’s request to raise up to $2 billion through a foreign currency-denominated instrument in Nigeria’s domestic financial market also received approval.

Loans Aligned with Budgetary Projections

Senator Wamakko emphasized that all borrowing items had already been integrated into the Medium-Term Expenditure Framework (MTEF) and the Fiscal Strategy Paper (FSP), which form the blueprint of the 2025 federal budget. According to him, the Senate’s action merely formalized what was previously outlined.

“The borrowing requests are not new; they were encapsulated in the already-approved MTEF and FSP documents,” Wamakko stated.

Supporting the motion, Senator Solomon Adeola, Chairman of the Senate Committee on Appropriations, reaffirmed that the loans were crucial to fully fund the 2025 budget.

“This approval ensures that all projected revenue streams—including loans—are secured to implement the Appropriation Act effectively,” Adeola noted.

Senator Sani Musa added that the disbursement timeline for the loans spans six years, clarifying that the funds would not be limited to a single fiscal year. He stressed that Nigeria had maintained a strong record of honoring its debt obligations.

“No economy can grow without strategic borrowing. What we are doing is in line with global best practices,” Musa remarked.

Senators Cite Favorable Loan Terms and Development Goals

Several lawmakers pointed out that the loans come with long-term, concessional terms designed to finance critical infrastructure and human capital development.

Senator Adetokunbo Abiru defended the borrowing framework, highlighting its compliance with the Fiscal Responsibility Act and Debt Management guidelines.

“These loans are not reckless—they are tied to developmental projects. The repayment periods range between 20 and 35 years, and the terms are highly favorable,” Abiru said.

Senator Victor Umeh voiced strong support for the borrowing, pointing to regional equity in project allocations. He particularly praised the inclusion of a $3 billion allocation to reconstruct the Eastern railway corridor.

“This is a monumental step for the Southeast. It’s the first time we’re seeing such a commitment toward rebuilding our critical rail infrastructure,” Umeh declared.

Deputy Senate President Jibrin Barau, who presided over the session, echoed the same sentiments. He applauded the committee’s thorough work and assured that all regions of the country would benefit from the borrowing plan.

“With this approval, the implementation of the 2025 budget can commence in earnest. This is a testament to the Renewed Hope Agenda—no part of Nigeria is being excluded,” Barau said.

He further stressed that all disbursed funds must strictly be used for capital and developmental projects, in compliance with existing public finance laws.

Concerns Raised Over Transparency and Debt Accountability

Despite the overwhelming support, not all lawmakers were on board without reservations. Senator Abdul Ningi raised red flags regarding transparency and accountability. He expressed concern over the lack of a detailed breakdown in the committee’s report, particularly on how the loans would be disbursed and repaid.

“We cannot borrow blindly. Nigerians deserve to know exactly how much is being borrowed in their name and for what purposes,” Ningi warned.

He insisted that the documents lacked critical information such as state-by-state allocations and the specific impact of each loan component on the populace.

“We have a constitutional responsibility to ask the tough questions. Without transparency, this process loses credibility,” he added.

Background on Nigeria’s Rising Debt Profile

President Tinubu’s borrowing request, initially submitted in May 2025, comes amid growing concerns over Nigeria’s ballooning public debt. According to the Debt Management Office (DMO), Nigeria’s total public debt surged to N149.39 trillion as of March 31, 2025. This figure represents a 22.8% increase—equivalent to N27.72 trillion—compared to N121.67 trillion recorded in the same period the previous year.

Despite the spike, government officials continue to defend borrowing as a necessary tool for funding infrastructure and economic reforms.

Outlook: Balancing Growth and Fiscal Responsibility

As Nigeria pushes forward with its 2025–2026 development agenda, the newly approved loans will serve as critical enablers for large-scale infrastructure, transportation, and human development projects. However, fiscal analysts warn that without transparent disbursement plans and strong oversight, the country risks sliding into a deeper debt trap.

The coming months will test the government’s commitment to accountability, as Nigerians closely watch how these borrowed funds will be utilized. While the Renewed Hope Agenda aims to stimulate growth and inclusiveness, its success will depend on how responsibly and equitably these resources are deployed.