The National Assembly recently approved President Bola Tinubu’s request for a $2.2 billion external loan to finance the 2024 budget, which faces a deficit of ₦9.7 trillion. The approval, granted just weeks before the budget year ends, has sparked mixed reactions among Nigerians.
Purpose of the Loan
The presidency stated that the loan, captured in the 2024 Appropriation Act, is essential for ongoing projects and programs critical to national development. Aliyu Wammako, Chairman of the Senate Committee on Local and Foreign Debts, emphasized that the loan would support Nigeria’s debt management strategy by reducing borrowing costs, extending debt maturity, and increasing external reserves.
The funds may be raised through Eurobonds in the International Capital Market. Both the Senate and the House of Representatives approved the loan unanimously.
Rising Concerns Over Nigeria’s Debt
Former Vice President Atiku Abubakar criticized the loan, highlighting Nigeria’s position as the third most indebted country to the International Development Association (IDA). He argued that the loan would exert “unbearable pressure” on the economy, questioning the government’s transparency and priorities.
“Nigeria is sinking further into debt,” Atiku said, accusing the administration of corruption and mismanagement. He also criticized the benchmarking of the loan at an exchange rate of ₦800 to $1, far below the current Central Bank rate of ₦1,600.
Public and Expert Reactions
Dr. Pogu Bitrus, President of the Middle Belt Forum, expressed concerns over using loans for recurrent expenses rather than capital projects. He lamented the burden being placed on future generations and called for a shift toward self-sufficiency, citing India as a model for sustainable development.
Lawyer and politician Maxi Okwu also condemned the practice, describing it as a failure of leadership and a drain on Nigeria’s resources. “These loans are not for development but for consumption,” he said, urging the government to explore alternative solutions.
Calls for Caution
Critics have urged the government to reassess its borrowing strategy, prioritize domestic resource management, and focus on projects that generate long-term economic benefits. With Nigeria’s debt profile rising, many believe the government must exercise greater caution to avoid mortgaging the country’s future.
Bottom Line
While the government insists that the $2.2 billion loan is crucial for national growth, the criticism highlights deeper issues of fiscal mismanagement, transparency, and economic planning. The decision has intensified the debate on Nigeria’s growing debt and its impact on the nation’s economic stability.
