Nigeria’s appetite for borrowing continues to raise important questions about the country’s fiscal direction, the sustainability of government spending and, more importantly, the economic returns citizens should expect from public debt.
The latest development came on Wednesday, November 4, 2026, when President Bola Tinubu requested the National Assembly’s approval for an external borrowing plan of $7.707 billion, equivalent to approximately ₦10.79 trillion at the budget exchange rate of ₦1,400 to the dollar.
The request, conveyed in a letter dated October 26 and read by Senate President Godswill Akpabio during plenary, is intended to finance part of the Federal Government’s 2026 budget deficit.
It also follows an earlier request by the President for legislative approval to process external borrowing facilities totalling $20.52 billion and €1.045 billion under the 2026–2027 Supplementary External Borrowing Plan. That earlier proposal has now been superseded by the new request, according to the Senate President.
The distinction is important. Nigerians should understand that the $7.7 billion is not being presented as an additional facility on top of the earlier proposal. Rather, it represents the external borrowing component of the ₦29.2 trillion in new borrowing provided for in the 2026 Appropriation Act.
Nevertheless, the development deserves more than a passing mention. It presents another opportunity to examine Nigeria’s borrowing strategy and the extent to which public debt is translating into tangible improvements in the lives of citizens.
Borrowing to finance development: How sustainable is the approach?
To be fair, borrowing is not inherently bad economic policy.
Countries borrow to finance infrastructure, expand productive capacity, stimulate economic activity and address funding gaps that cannot immediately be met through government revenue. For a developing country like Nigeria, with substantial infrastructure deficits across transportation, electricity, healthcare, education and other critical sectors, external financing can play an important role in development.
The argument, therefore, should not be that Nigeria must never borrow.
The more important question is what the country borrows for, the conditions attached to such borrowing, its capacity to repay and the economic value generated from the funds.
According to the President’s latest request, the proposed external financing will support projects and programmes in defence and security, transportation, agriculture, power, education and healthcare.
These are critical sectors. Nigeria needs better roads, reliable electricity, functional hospitals, quality education and improved security. However, identifying important sectors is only the beginning of responsible borrowing.
Nigerians deserve to know the specific projects that will receive the funds, their implementation timelines, expected outcomes and the institutions responsible for delivering them.
A borrowing plan should not become a collection of broad promises that cannot be independently measured.
The real concern is not just how much Nigeria borrows
One of the most important considerations in assessing public debt is the country’s ability to service it.
Debt sustainability is not determined by the amount borrowed alone. Government revenue, interest rates, repayment periods, foreign exchange exposure and the returns generated by financed projects all matter.
Nigeria’s revenue challenge makes this particularly important.
When government revenue is insufficient to meet recurrent obligations, debt servicing and other essential expenditures, the pressure on public finances becomes more pronounced.
Every naira committed to servicing debt is a naira that must be accounted for alongside competing demands for infrastructure, healthcare, education, security and social protection.
External borrowing introduces another consideration: exchange rate risk.
Loans denominated in foreign currencies must ultimately be repaid in those currencies. Where the naira weakens significantly, the domestic currency cost of meeting those obligations can increase, even when the original dollar-denominated debt remains unchanged.
This is why the terms of the proposed borrowing matter just as much as the amount.
The President has indicated that the government intends to explore different financing options, including loans from multilateral and bilateral institutions, commercial facilities, bridge financing and Eurobond issuance.
He also indicated that greater emphasis would be placed on Eurobonds because of the speed with which they can be raised and the potential to secure larger amounts.
However, the final interest rates, repayment periods and other conditions will depend on prevailing market conditions when the transactions are concluded.
This means Nigerians should not simply be told that the government intends to secure favourable terms. They should eventually be able to examine the actual terms secured.
What happens to the money already borrowed?
Perhaps the most important question in Nigeria’s borrowing conversation is accountability.
Over the years, successive administrations have justified borrowing on the grounds of infrastructure development, economic expansion and improved public services.
Yet, the existence of infrastructure deficits remains evident across many parts of the country.
This does not automatically mean that previous loans were mismanaged or that no projects were delivered. Such conclusions require evidence. However, it reinforces the need for transparent reporting on how borrowed funds are utilised and what they achieve.
Before additional borrowing becomes another routine feature of budget financing, the government must demonstrate the outcomes of previous borrowing arrangements.
How many projects have been completed? How many remain ongoing? What was the original cost, what has been spent, and what is the economic benefit to the communities concerned?
Where projects have stalled, who is responsible? Where costs have increased, what explains the variation?
These are legitimate questions in a democracy, particularly when the obligations created by government borrowing extend beyond the administration that negotiates them.
Public debt is not a private financial arrangement between the government and its lenders. It creates obligations that affect the country’s fiscal choices and, ultimately, future generations.
The responsibility of the National Assembly
The Senate has referred the latest request to its Committee on Local and Foreign Debts for further consideration.
This process must be more than a procedural exercise.
The National Assembly has a constitutional and legislative responsibility to scrutinise public borrowing, examine the proposed financing arrangements and ensure that the interests of Nigerians are protected.
Lawmakers should demand clarity on the specific projects to be financed, the expected economic returns, the interest rates, repayment schedules, currency risks and the government’s capacity to meet its obligations.
They should also examine how the proposed external financing fits into the country’s wider debt management strategy.
The fact that borrowing is provided for in an approved budget does not remove the need for rigorous scrutiny of the actual financing arrangements.
Legislative approval should be informed by evidence, not merely the urgency of accessing funds.
The government, on its part, must understand that public confidence cannot be built solely on assurances that borrowed funds will support development. It must be built on visible results, transparent expenditure and measurable improvements in public services.
Nigeria needs more than access to loans
There is also a bigger fiscal question that must not be lost in the debate.
How long can Nigeria continue to depend heavily on borrowing to bridge its budget financing gaps without addressing the structural weaknesses affecting government revenue?
The country needs stronger revenue mobilisation, more efficient public expenditure, a broader productive economy and institutions capable of ensuring that public resources deliver measurable value.
Borrowing can support development, but it cannot permanently substitute for a sustainable revenue system.
Neither should it become an excuse to postpone difficult decisions about wasteful expenditure, inefficient public institutions and the need to improve the productivity of the economy.
The government must demonstrate that it is borrowing to create economic value, not simply to keep government operations running.
The question Nigerians should keep asking
President Tinubu’s $7.7 billion borrowing request will now undergo further legislative consideration. Whether the National Assembly eventually approves it or seeks further clarification, the larger issue remains the same.
Nigeria needs development financing, but it also needs financial discipline.
The country cannot measure the success of its borrowing strategy by how much money it can access from international markets. It must be measured by what those funds accomplish, how transparently they are spent and whether the resulting economic benefits justify the obligations created.
Nigerians should not have to wait until repayment becomes a crisis before asking questions about the wisdom of public borrowing.
The government must be prepared to explain not only why it needs the money, but also what Nigerians will get in return.
Because borrowing is not development in itself. What a country builds with borrowed money, and its ability to repay without compromising the future, is what ultimately matters.
