President Bola Ahmed Tinubu has sought the Senate’s approval for a new $516.33 million external loan, in a move that comes against the backdrop of Nigeria’s rising debt burden and growing servicing obligations.
The request was conveyed in a letter to Senate President Godswill Akpabio and read during Thursday’s plenary. According to the President, the loan - expected to be obtained from Deutsche Bank - will fund the Sokoto–Badagry 1,000km Super Highway project under the government’s existing borrowing framework.
Tinubu called for swift legislative approval, citing the importance of the project. The Senate President subsequently referred the request to the Committee on Local and Foreign Debts for review, directing it to report back within one week.
The development comes as the Federal Government continues to rely on both external and domestic borrowing to finance its fiscal needs. The Debt Management Office has indicated that the government will raise N700 billion from the domestic bond market in April 2026.
The planned auction, slated for April 27 with settlement on April 29, will involve the re-opening of three existing instruments: the 17.945 per cent FGN August 2030 bond (N300 billion), the 17.95 per cent FGN June 2032 bond (N100 billion), and the 22.60 per cent FGN January 2035 bond (N300 billion).
While the monthly borrowing size has declined steadily from N900 billion in January to N700 billion in April, the government’s continued presence in the debt market highlights persistent financing pressures.
The high coupon rates attached to the instruments reflect prevailing macroeconomic conditions, including elevated inflation and tight monetary policy, which have driven yields upward and increased borrowing costs.
Fiscal data further illustrate the strain on public finances. Nigeria’s debt servicing rose to approximately N16 trillion in 2025, up from N13.02 trillion in 2024. Total public debt stood at about N159.28 trillion as of December 2025 and is projected to exceed N170 trillion as new borrowings are added.
Analysts say the combined effect of fresh external loans and sustained domestic issuances is intensifying concerns over debt sustainability, particularly as a significant portion of government revenue is increasingly being allocated to servicing existing obligations.
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