Senate Approves N1.15 Trillion Loan for 2025 Budget, Fueling National Debt Concerns

In a move that has amplified anxieties over the nation’s fiscal health, the Nigerian Senate has greenlit a request from President Bola Tinubu to secure a N1.15 trillion loan from the domestic debt market. The funds are earmarked to cover the remaining unfunded deficit in the 2025 budget, a decision that casts a spotlight on the country’s escalating debt profile.

A Deepening Fiscal Deficit

The approval followed the presentation and adoption of a report by the Senate Committee on Local and Foreign Debt during a plenary session. The committee’s findings revealed a significant fiscal gap. The 2025 Appropriation Act authorizes a total government expenditure of N59.99 trillion, which is N5.25 trillion higher than the executive’s initial proposal of N54.74 trillion.

This upward revision resulted in a total fiscal deficit of N14.10 trillion. While borrowing for N12.95 trillion of this shortfall had previously been approved, the newly authorized N1.15 trillion (N1,147,462,863,321) is intended to plug the final gap. The committee argued that this additional borrowing is essential to sustain critical government initiatives and ensure the full implementation of projects outlined in the 2025 budget.

Mounting Debt, Mounting Worries

This decision arrives against a sobering backdrop. Nigeria’s total public debt has ballooned to a record N152.39 trillion (approximately $99.68 billion) as of June 2025. This surge is attributed to consistent new borrowing and a depreciation of the national currency. The question on many minds is: how sustainable is this path?

Economists have long sounded the alarm, pointing out that debt servicing costs already consume a staggering 70% of federal revenue. This massive financial outflow severely constrains the government’s ability to invest in vital sectors such as infrastructure modernization, healthcare, and education, potentially hampering long-term economic growth and social development.

Calls for Prudence and Transparency

Recognizing the gravity of the situation, Senator Abdul Ningi (Bauchi Central) used the platform to call for enhanced fiscal oversight. He urged the Senate Committee on Appropriations to rigorously monitor the deployment of the borrowed funds, ensuring absolute transparency and that every naira is spent for its intended purpose.

“The Committee on Appropriations must ensure that every kobo borrowed is used prudently,” Ningi asserted. His statement underscores the pressing need for stricter financial discipline, especially as the nation grapples with volatile oil revenues and a gradual economic recovery. The effectiveness of this oversight will be crucial in determining whether this new debt translates into tangible national benefits or simply adds to a burdensome cycle.

Source: By Obinna Uballa