Senate approves Tinubu’s N1.15tn loan to cover 2025 budget shortfall as debt worries mount

The Senate on Wednesday approved President Bola Tinubu’s request to borrow N1.15 trillion from the domestic market to fund the outstanding portion of the 2025 budget deficit, a move that adds to growing concerns over Nigeria’s escalating debt burden.

Recall that Nigeria’s debt profile reached a record high of N152.39 trillion (approx. $99.68 billion) as of June 2025, driven by fresh borrowing and currency depreciation.

The approval followed the adoption of the report of the Senate Committee on Local and Foreign Debt during plenary, chaired by Senator Haruna Manu.

The committee explained that the 2025 Appropriation Act pegged total government spending at N59.99 trillion, an upward revision of N5.25 trillion from the N54.74 trillion initially proposed by the Executive. This expansion widened the budget deficit to N14.10 trillion, of which N12.95 trillion had already been approved for borrowing. The fresh N1.15 trillion loan will close the remaining funding gap to allow full budget execution.

Committee members argued that the additional borrowing is necessary to sustain key development projects and maintain fiscal stability, despite the economic strain caused by low revenue generation and heavy debt servicing obligations.

Economists caution that the continued dependence on borrowing to finance deficits could push the economy deeper into a debt trap, with over 70 per cent of government revenue already devoted to debt servicing.

During the debate, Senator Abdul Ningi (Bauchi Central) successfully moved a motion mandating the Senate Committee on Appropriations to intensify oversight to ensure that all borrowed funds are transparently managed and applied strictly to their approved projects.

He said the National Assembly must “guard against leakages and misuse of borrowed funds” to prevent Nigeria’s fiscal situation from worsening.

While the Tinubu administration has defended its borrowing plan as a necessary step to stabilise public finances and sustain development projects, fiscal experts insist that the country must prioritise revenue diversification, spending efficiency, and debt transparency to avert a full-blown debt crisis.