Nigeria’s total public debt is expected to reach ₦155 trillion after the Senate approved President Bola Ahmed Tinubu’s request for a new $6 billion external loan package on Tuesday. This decision has sparked further debate about the country’s financial path.

The loan approval came just hours after Senate President Godswill Akpabio read the President’s request on the Senate floor. It adds roughly ₦8.4 trillion to the nation’s debt, which was ₦146.69 trillion at the end of 2025.

What the Loan Package Entails

The $6 billion loan includes two main parts:

• A $5 billion structured Total Return Swap (TRS) external financing program with First Abu Dhabi Bank. This program is meant to be drawn in sections and will support budget implementation. It will also support important infrastructure development and refinancing of existing domestic and external debt.
• A $1 billion loan from UK Export Finance, designated for upgrading key port facilities. This includes the Lagos Port Complex and Tin Can Island Port. It aims to improve operational efficiency and strengthen trade competitiveness.

In letters to the Senate, President Tinubu requested approval “under Sections 21(1) and 27(1) of the Debt Management Office (Establishment, Etc.) Act, 2003” for both parts of the loan and allowed the Federal Government to access the funds in multiple sections.

Senate’s Swift Approval

The National Assembly acted quickly. Reports indicate that lawmakers approved the loan request on the same day it was presented, after reviewing a report by Senator Aliyu Wamakko, Chairman of the Senate Committee on Local and Foreign Debts.

This quick approval highlights the government’s pressing need to fill fiscal gaps and fund infrastructure projects amid ongoing economic challenges.

Debt Profile and Sustainability Concerns

Analysts warn that this additional borrowing will further increase Nigeria’s debt servicing obligations. Before this new loan, total public debt was about $103.20 billion (around ₦146.69 trillion), with a debt-to-GDP ratio near 36.92%. While this is within the legal limit, it indicates rising financial risk.

Experts also caution that the country’s debt service-to-revenue ratio, which was predicted to be around 60% by the end of 2025, could get worse unless there is significant improvement in revenue generation.

Government Justification

According to the committee’s presentation, the structured TRS financing deal is “backed by Naira-denominated Federal Government securities,” and its terms aim to offer flexibility and ease immediate fiscal pressure as the funds are accessed.

Supporters argue that this financing is essential for budget execution, infrastructure development, and refinancing more costly debt. Critics, however, are concerned about long-term sustainability and currency risks.

Political and Public Reaction

While the Senate’s decision allows the Tinubu administration to obtain the funds, the approval has faced criticism from opposition figures and civil society groups.

They argue that Nigeria should focus on improving domestic revenue and practicing more prudent fiscal management to avoid becoming overly reliant on external borrowing.