Former Vice President and presidential candidate of Peoples Democratic Party (PDP) in the 2023 general election, Atiku Abubukar, yesterday accused the President Bola Tinubu government of mortgaging Nigeria’s future by taking too many loans.
Atiku said the decision to take further loans was not only reckless but also a dangerous move that threatened the future of citizens and generations yet unborn.
National President of Nigerian Chamber of Commerce, Industry, Mines and Agriculture (NACCIMA), and Centre for Private Enterprises (CPPE) also raised concerns over the federal government’s growing appetite for public borrowings, especially given the significant disparity between actual oil production levels and budgeted projections.
They also expressed worry over public debt sustainability amid fiscal challenges.
However, analysts said the federal government’s new borrowing requests could help narrow the fiscal deficit in the 2025 budget if utilised for development purposes.
The reservations came against the backdrop of Tinubu’s formal request for the approval of the National Assembly to secure a new wave of multi-currency loans amounting to approximately $23.5 billion, €2.265 billion, ¥15 billion, and N757.9 billion, totalling about N45 trillion when converted to the naira.
The borrowing plan spanning multiple international lenders and development institutions marks one of the most ambitious external financing proposals of the Tinubu administration.
Specifically, the president sought approval to raise up to $2 billion in capital from the domestic debt market.
But there are growing concerns over the continued public debt accumulation by the current administration amid elevated borrowings from previous administrations.
In a statement he signed, Atiku said the “announcement by the Tinubu-led APC government to pursue fresh external and domestic loans is a reckless and dangerous move that threatens the future of Nigeria and generations yet unborn”.
The former vice president stated, “Despite national outrage, this administration is pushing ahead with plans to borrow $21.54 billion, €2.19 billion, and ¥15 billion — an equivalent of over $24 billion, which is more than 60 per cent of Nigeria’s total foreign exchange reserves. This borrowing spree will raise our total public debt from N144.7 trillion to a crushing N183 trillion.”
He explained that this was coming at a time when Nigeria’s debt burden was already alarming.
According to Atiku, “As of December 31, 2024, public debt stood at $94 billion (N144.7 trillion).
“Since President Tinubu assumed office in 2023, public debt has jumped by 65.6 per cent.
“Under the APC-led administration since 2015, public debt has ballooned by 1,048 per cent, from N12.6 trillion to N144.7 trillion
“The debt-to-GDP ratio has exceeded 50 per cent.
“The debt-service-to-revenue ratio is over 130 per cent, meaning the government now spends more on repaying loans than it earns.”
Atiku stated, “This is not just unsustainable — it is immoral.
“The Tinubu administration is borrowing money not for development but to service existing loans, fuelling a debt spiral that leaves nothing for infrastructure, education, healthcare, or jobs.
“This addiction to borrowing, entrenched under the APC-led administration and now accelerated by President Tinubu, has turned public finance into a Ponzi scheme — borrowing to pay debt, then borrowing again to pay interest. Nigeria is now caught in a vicious cycle that mortgages the future to pay for the past.
“We warn that this is economic sabotage in plain sight.”
The former vice president said, “We demand that this reckless borrowing plan be halted immediately. We call on lawmakers, civil society organisations, the media, and the international community to take urgent action to stop this looming catastrophe.
“Nigeria must not be sold into debt slavery.”
National President of NACCIMA, Mr. Dele Oye, voice similar worry, saying the federal government’s growing appetite for public borrowings is particularly disturbing, especially given the actual oil production levels, which were about 1.5 million barrels per day (mbpd), lower than the budgeted projections of over 2 mbpd at projected price of $75 per barrel.
Oye said while borrowing might be necessary to bridge the financial gap, the magnitude of the borrowing in a single transaction raised questions about fiscal sustainability and the potential burden on future generations.
He said it was crucial for the government to ensure responsible and effective allocation of borrowed funds.
Oye also said the implications of heightened public borrowing were diverse and profound because excessive borrowing could lead to inflationary pressures due to increased money supply.
He warned that the “escalating debt burden” would potentially divert resources away from essential public services.
The NACCIMA president said, “Notably, Fitch projects Nigeria’s external debt service to hit $5.2 billion in 2025, a significant increase from $1.07 billion as of December 2024.”
Other implications of growing public revenue, according to Oye, include exchange rate fluctuations that would affect trade and investment, as well as crowding out private investment and driving up interest rates.
Oye, however, stated that government’s ability to manage its finances effectively and implement structural reforms will be critical in determining the sustainability of its borrowing levels.
He advised the government to prioritise transparency and accountability, and pursue comprehensive fiscal reforms, while vigilantly monitoring economic indicators.
He said, “By adopting a pragmatic and sustainable borrowing strategy, the government can reduce risks and enhance a stable economic environment conducive to growth and prosperity.”
Similarly, Founder/Chief Executive, CPPE, Dr. Muda Yusuf, expressed concern over the sustainability of the public debt.
Yusuf said the country’s public debt to GDP ratio was currently about 52 per cent, which was already above the debt sustainability threshold of 50 per cent.
He added that the 2024 fourth quarter fiscals published by the Central Bank of Nigeria (CBN) showed a debt service to revenue ratio of over 80 per cent, and debt service to actual capital expenditure ratio of over 200 per cent.
He said those were disturbing statistics that should compel the government to tread cautiously on the matter.
Yusuf said, “I am concerned about issues of debt sustainability. Right now the debt service component of our budget is already on the very high side.
“Debt service appropriation is currently far above the allocation for capital spending. If we are not careful, we could find ourselves in a situation where debt service allocation will be crowding out some major spending of the government.”
He also said it was more disturbing that the latest request to the National Assembly for approval to borrow was heavy on external borrowing, which was difficult to service.
Yusuf said, “So, we need to tread very cautiously with respect to debt commitments. We need to carefully interrogate the cost of the debts as well as the purposes the debts will be committed. I believe that we need to focus a lot more on the issues of fiscal consolidation.”
Yusuf further pointed out that current reforms of the government were expected to have impacted more significantly on revenue and the expectation of many Nigerians was that this will help to advance the objective of fiscal consolidation to ensure a much better balance between expenditure and revenue.
He said, “There is a need to be very cautious so that we do not run into debt sustainability crisis. This is extremely very important. My expectation is that with the tax reforms and all the efforts around the oil and gas sector as well as the new management we have at NNPC, the serious commitment we are getting for a more secured environment to boost oil production and foreign exchange earnings would help to reduce the need for significant debt exposure.
“On the whole, I think that it is a bit worrying and also we need to tread very carefully as far as this new debt commitment is concerned.”
