Economic analysts have renewed concerns over Nigeria’s growing debt profile, warning that the country’s debt-to-revenue ratio has reached unsustainable levels and could undermine long-term fiscal stability.
Despite increased revenue allocations from the Federation Account Allocation Committee (FAAC), the Federal Government continues to pursue new loans. President Bola Tinubu recently sought Senate approval for a $516.3 million external loan from Deutsche Bank to fund parts of the Sokoto–Badagry Superhighway project.
This request adds to a series of recent borrowings, including $7.8 billion approved under the 2022–2024 plan, $2.2 billion for the 2024 budget deficit, and $21.54 billion alongside other facilities approved for the 2025–2026 fiscal period.
Meanwhile, FAAC data show that a total of N5.899 trillion was shared among the three tiers of government between January and March 2026, reflecting steady revenue growth. The Federal Government received N2.118 trillion, while states and local governments got N2.016 trillion and N1.43 trillion, respectively.
However, rising revenues have not slowed borrowing. Nigeria’s 2026 borrowing plan has increased to N29.2 trillion against a projected fiscal deficit of N31.46 trillion. Total public debt stood at N159.28 trillion as of December 2025, with debt servicing estimated at about N16 trillion in 2025.
BudgIT CEO Seun Onigbinde described the situation as unsustainable, noting that a significant portion of government revenue is consumed by debt servicing. “The biggest problem is the cost of servicing debt, which leaves limited resources for other critical sectors,” he said.
Fiscal analyst Kio Amachree also questioned the pace of borrowing, pointing to a debt-service-to-revenue ratio of 116.8 per cent in 2024, far above global benchmarks. He warned that continued borrowing without clear outcomes could push public debt above N200 trillion by 2027.
The Emir of Kano, Muhammadu Sanusi II, criticised the government’s fiscal approach, questioning the need for borrowing despite savings from subsidy removal and exchange rate reforms. He urged stronger fiscal discipline and better utilisation of available resources.
Opposition lawmakers under the African Democratic Congress (ADC) also faulted the latest loan request, calling for greater transparency, detailed cost-benefit analysis, and a clear repayment plan before approval.
Analysts say unless borrowing is matched with visible development outcomes and improved revenue generation, Nigeria risks deepening its fiscal vulnerabilities while limiting investment in critical sectors.
