Politics

Senate Supports Tinubu’s Plan to Secure $21.8 Billion in New Loans

Published by Tope Fakinlede on July 23rd, 2025.

Senate Supports Tinubu’s Plan to Secure $21.8 Billion in New Loans

Bola Ahmed Tinubu

On Tuesday, the Nigerian Senate granted approval to President Bola Tinubu’s 2025–2026 external borrowing plan, which includes a request to obtain $21.8 billion, €2.1 billion, and ¥15 billion in loans, along with a €65 million grant. The funds are earmarked for critical development projects across infrastructure, health, education, water, and other priority sectors.

As part of the broader financial strategy, the Senate also gave the green light for the Federal Government to issue a ₦757.98 billion bond in the domestic market, aimed at clearing pension arrears under the Contributory Pension Scheme (CPS). Thousands of retirees are expected to benefit from this long-awaited settlement.

Additionally, lawmakers approved a $2 billion borrowing initiative through a new domestic foreign-currency bond programme. This move is supported by Executive Order No. 16 of 2023, which authorizes the Debt Management Office (DMO) to raise dollar-denominated funds within Nigeria without depleting the country’s foreign reserves.

The approvals followed recommendations from the Senate Committee on Local and Foreign Debts, chaired by Senator Aliyu Wamakko.

However, the decision was not without controversy. Some senators raised alarms over Nigeria’s ballooning debt, currently estimated at over ₦121 trillion, with external liabilities surpassing $43 billion. Senator Abdul Ningi strongly opposed the motion, criticizing the lack of a clear repayment strategy.

> “These loans will be a burden for generations to come. I’ve reviewed the documents and see no solid plan for repayment,” Ningi said.

Still, others argued in favor of the borrowing. Senators such as Adetokunbo Abiru and Finance Committee Chairman Sani Musa insisted that the loans came with favorable terms and were essential for long-term economic growth.

President Tinubu first submitted the borrowing requests on May 27, emphasizing their role in funding impactful, high-return projects designed to boost the economy and improve public services.

Supporters of the plan say it marks a shift from the borrowing practices of previous administrations. Unlike past loans used to plug budget deficits, this funding is said to be targeted at specific, revenue-generating initiatives in sectors like power, transportation, technology, and social development.

Still, concerns persist.

> “Nigeria is essentially operating on borrowed time and money,” one opposition lawmaker told reporters. “People are battling high inflation, job losses, and currency instability while the government keeps expanding its debt profile.”

Analysts warn that while the new borrowing framework could create fiscal breathing room, the success of the plan depends on transparency, efficient project execution, and measurable returns.

Tuesday’s approvals offer the Tinubu administration greater financial leverage—but also increase pressure to deliver real improvements in the lives of ordinary Nigerians. For many, the ultimate question is: will this borrowing lead to meaningful development—or more economic hardship?