The Federal Government is pursuing fresh loans worth $1.75bn from the World Bank, despite recording a significant 40.5 per cent increase in revenue between January and August 2025.
According to The Punch, the Special Adviser to the President on Information and Strategy, Bayo Onanuga, total collections during the first eight months of the year rose to N20.59tn compared to N14.6tn in the same period of 2024. He explained that non-oil revenues now account for 75 per cent of the inflows, a development which, according to him, places the government on course to meet its annual targets.
However, official data obtained from the World Bank indicate that Nigeria is still turning to external borrowing to finance major projects in agriculture, health, digital infrastructure, and support for small and medium-sized enterprises.
The loans are expected to be approved before the end of the year, with the projects currently at different stages of review and negotiation.
Economists have reacted with mixed opinions. Lagos-based analyst, Adewale Abimbola, said borrowing is not necessarily harmful if loans are concessionary and tied to projects capable of generating returns.
“If the loans are structured around viable projects, then borrowing in itself is not a bad idea. The critical issue is whether they are well utilised,” he stated.
But development economist, Dr Aliyu Ilias, expressed concern over the rising debt stock, which he noted had climbed from about N87tn at the end of the Buhari administration to N149tn under President Tinubu, with fears it could approach N180tn.
“If government revenue has improved as claimed, then this level of borrowing is questionable,” he argued, warning that debt servicing is already crowding out capital expenditure.
Similarly, the CEO of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said while deficit financing is a common feature of national budgets worldwide, Nigeria must focus on debt sustainability. He stressed that without stronger revenue mobilisation, the country risks sliding into a cycle of borrowing to service existing debt.
Data from the Debt Management Office show that Nigeria’s debt to the World Bank stood at $18.23bn as of March 2025, representing about 40 per cent of the country’s total external debt.