Fresh Loans, Unpaid Obligations & Thin Savings: The Questions Behind Tinubu’s $21.7 Billion Request
By FIDELUS ZWANSON
NIGERIA’S latest external borrowing proposal has reopened a difficult debate over how the Federal Government finances development, manages existing debt and prepares for future repayments.
President Bola Tinubu wants the National Assembly to approve loans worth $20.52 billion and €1.045 billion under the 2026–2027 Supplementary External Borrowing Plan. He says the money will support infrastructure and development projects across the country.
However, the request comes amid a sharp rise in public debt and reported shortfalls in funding the sinking fund designed to help retire maturing loans. Consequently, the proposal raises a central question: can Nigeria continue to borrow on this scale without putting greater pressure on future budgets?
A Sinking Fund That Fell Short of Budgeted Provisions
Budget Implementation Reports show that the Federal Government remitted only ₦374.63 billion of the ₦1.32 trillion budgeted for the Sinking Fund to Retire Maturing Loans between 2021 and 2025.
That amount represents just 28.4 per cent of the total provision. The figures suggest a substantial gap between the government’s budgeted commitments and the resources it actually released for the purpose.
In 2021, the government provided ₦200 billion but released only ₦600 million. Although the provision increased to ₦270.71 billion in 2022 and ₦247.73 billion in 2023, the account reported no releases in either year.
For 2024, the government budgeted ₦223.66 billion and released ₦265.86 billion, with the entire amount arriving in the fourth quarter. Meanwhile, the 2025 provision stood at ₦377.30 billion, while releases had reached ₦108.17 billion by September. The comprehensive report for that year was not yet available in the supplied account.
Looking at the wider period from 2016 to 2025, the government budgeted ₦2.18 trillion for sinking fund financing. Yet, as the gap between revenue and expenditure widened, funds intended for maturing debt were reportedly redirected to other budget lines.
This raises questions about fiscal planning. A sinking fund can help the government prepare for repayment dates and reduce the need to raise fresh money when obligations mature. When funding falls short, however, officials may face greater pressure to refinance those obligations or find money elsewhere.
Borrowing to Repay Borrowing
Refinancing is not inherently a sign of financial distress. Governments routinely replace maturing debt, extend repayment periods or seek cheaper financing to manage cash flow.
The risks increase, however, when refinancing becomes a persistent response to inadequate revenue or insufficient savings. In such circumstances, new loans may meet immediate obligations without resolving the underlying funding gap.
Nigeria’s public debt rose from ₦87.38 trillion in June 2023 to ₦166.79 trillion in June 2026, an increase of ₦79.41 trillion. However, that difference does not represent cash borrowed by the Tinubu administration alone.
The naira’s depreciation increased the domestic-currency value of foreign debt, contributing to the reported rise. Even with that qualification, the debt stock and the reported shortfall in sinking fund releases make repayment planning an important part of the borrowing debate.
Another concern involves the transparency of refinancing. The supplied report notes that the government has not clearly disclosed the proportion of maturing debt refinanced through new borrowing. It also suggests that some government securities issued for budget support may be used to refinance existing obligations.
Furthermore, actual debt-service expenditure has reportedly exceeded budgeted amounts in recent years. If the government must move money from other allocations to meet debt obligations, it could leave less fiscal room for public services and development projects.
Infrastructure Needs Drive Tinubu’s Request
The president has defended the proposed borrowing as a means of addressing Nigeria’s infrastructure deficit and financing projects that could support economic development.
In a letter read by Senate President Godswill Akpabio during plenary, Tinubu sought the “consideration and early approval” of the National Assembly for the supplementary external borrowing plan.
The proposal comprises $20,517,755,901 and €1,045,083,643. The government intends to finance projects in power, transportation, healthcare, education, agriculture, water supply, security, employment generation and financial management reforms.
According to Tinubu, the projects underwent technical and economic evaluations before their selection. He said they would promote job creation, skills acquisition, entrepreneurship, poverty reduction and food security, with most projects spread across the 36 states and the Federal Capital Territory.
Those objectives reflect substantial development needs. Nevertheless, the key issue is whether the projects can deliver measurable benefits at a cost that justifies the loans.
For example, infrastructure investments may improve productivity, expand access to essential services and support economic activity. Yet those benefits depend on project design, procurement, implementation, maintenance and the ability to deliver results within approved budgets.
Therefore, the government’s broad sectoral priorities need to be matched by detailed project information and credible assessments of the expected returns.
Previous Borrowing Proposals Demand a Consolidated Account
The latest request also revives questions about the cumulative scale and status of Nigeria’s earlier borrowing plans.
The 10th Senate has considered several substantial external financing proposals. Among them was a $7.8 billion and €100 million borrowing plan for infrastructure and other development projects.
Other proposals included a $5.8 billion facility covering power, transport, healthcare, education, agriculture and water supply. The National Assembly also considered a $1.5 billion World Bank facility for budget financing and economic reforms and a $1.3 billion African Development Bank facility for agricultural development and food security.
In addition, lawmakers considered a $2.2 billion external borrowing request to finance the 2024 budget deficit and other projects, as well as a separate $1.5 billion World Bank facility for economic stabilisation and development support.
The borrowing process also spans different administrations. On November 28, 2023, Tinubu sought legislative authorisation for $8.699 billion and €100 million under a 2022–2024 borrowing plan approved by the Federal Executive Council under former President Muhammadu Buhari in May 2023.
A year later, on 19 November 2024, the House of Representatives received a request for approximately $2.209 billion, equivalent to ₦1.768 trillion at the budget exchange rate cited at the time. That request related to external borrowing provisions in the 2024 Appropriation Act.
During March 2026, the National Assembly considered a $5 billion structured total-return-swap programme with First Abu Dhabi Bank, intended to support government financing, fiscal liquidity, infrastructure and the repayment of relatively expensive debt.
Lawmakers also considered approximately $1.001 billion in UK Export Finance-backed lending arranged by Citibank for the rehabilitation of the Lagos Port Complex and Tin Can Island Port Complex. The following month, Tinubu requested approval for an external loan of approximately $516 million for the Sokoto–Badagry Superhighway.
These transactions and proposals cannot automatically be treated as completed borrowing or outstanding debt. Each has to be assessed according to its actual status, terms and disbursements.
That distinction makes a consolidated public borrowing register particularly important. It should identify each request, the relevant legislative approval, the signed financing agreement, the amount disbursed, the purpose of the funds, repayments made and the remaining liability.
Without such a record, lawmakers and citizens may struggle to determine how previous facilities have supported projects and how much of the country’s future revenue is already committed to debt servicing.
Senate Faces Questions over Earlier Approvals
After reading Tinubu’s letter, Akpabio observed that elements of the proposal had featured in earlier budgetary and borrowing arrangements. However, he expressed uncertainty about the precise period covered by previous approvals.
The Senate subsequently referred the request to its Committee on Local and Foreign Debts, with possible input from the Committees on Appropriations and Finance.
That review presents an opportunity to establish whether the proposed facilities duplicate earlier approvals, extend existing plans or finance additional projects. It also gives lawmakers an opportunity to examine the loan terms, repayment schedules and expected economic benefits.
The central task is to distinguish between a government’s authority to borrow and the evidence that borrowing will produce value. Approval alone does not establish that a project is viable, that its funding will be used efficiently or that it will generate enough revenue to support repayment.
Atiku Calls for Project-by-Project Disclosure
Former Vice President Atiku Abubakar has urged the National Assembly to suspend consideration of the proposal until the government discloses detailed information about the projects it intends to finance.
In a statement issued by Phrank Shaibu, Director of Strategic Communication of the African Democratic Congress Presidential Campaign Council, Atiku said lawmakers should demand information about project names, locations, costs, contractors, loan terms and repayment obligations.
He argued that identifying broad sectors such as power, transport and healthcare was insufficient to allow Nigerians to scrutinise the proposed borrowing.
Atiku also linked the request to his earlier warning about a possible loan of up to $20 billion associated with the Lagos–Calabar Coastal Highway. He maintained that the new request strengthened his concerns about the administration’s borrowing plans.
However, the supplied details of the presidential request do not establish that the entire proposed facility would finance that highway. The allegation must therefore remain attributed to Atiku rather than presented as a confirmed description of the loan’s intended use.
The former vice president further alleged that the reported inland rerouting of the coastal highway could provide a channel for borrowed funds to benefit political campaigners and favoured contractors. These claims were not independently established in the account provided.
Atiku warned that borrowing without the required constitutional, statutory and due-process safeguards could face scrutiny if he assumed office.
His intervention has placed project disclosure and legislative oversight at the centre of the political debate. Still, the underlying questions about repayment capacity, project performance and fiscal transparency extend beyond party politics.
The ₦13.51 Trillion Deficit Adds to Fiscal Pressure
The report cited a fiscal deficit of ₦13.51 trillion for 2024. That shortfall reflects the difference between the government’s expenditure and revenue during the period.
Persistent deficits can increase borrowing requirements, particularly when government revenue fails to keep pace with spending commitments. In Nigeria, the continued reliance on crude-related revenue and the challenge of broadening the tax base have added to concerns about the sustainability of public finances.
Meanwhile, debt-service obligations compete with funding for infrastructure, healthcare, education, security and other public priorities. As a result, the cost of servicing existing loans matters as much as the headline amount of new borrowing.
A sustainable borrowing strategy must therefore address several connected issues: the cost of financing, the timing of repayments, the quality of projects, the government’s revenue outlook and its ability to maintain essential spending.
Transparency & Returns Will Determine the Case for Borrowing
Ultimately, the question is not whether Nigeria needs infrastructure investment. It is whether the proposed borrowing offers a financially credible way to meet that need.
The Federal Government must demonstrate how much each project will cost, where it will be located, who will execute it, when it will be completed and what economic or social benefits it is expected to deliver.
Lawmakers also need clear information about interest rates, fees, repayment schedules, currency exposure and the relationship between the latest request and previously approved financing plans.
Equally important, the government must explain how it intends to meet maturing obligations while funding essential public services. The reported gap between sinking fund provisions and actual releases makes that question particularly pressing.
If the proposed loans finance productive projects, deliver measurable benefits and come with manageable repayment terms, the government will have a stronger factual basis for defending them. If those details remain unclear, concerns about refinancing, transparency and future fiscal pressure are likely to persist.
The Senate’s scrutiny should therefore extend beyond the size of the proposed facilities. It should establish what Nigeria will receive in return, how the government will account for the funds and whether the resulting obligations fit within a credible long-term debt-management strategy.
