The Socio-Economic Rights and Accountability Project (SERAP) has urged the National Assembly to reject President Bola Tinubu's request to borrow $24 billion, warning that the proposed loan would significantly worsen Nigeria's already precarious debt situation.

In a statement posted on its official X account, SERAP cautioned that the new borrowing plan would raise Nigeria's total debt stock to an estimated N183 trillion, a level it described as "clearly not sustainable and not in the public interest."

"The National Assembly must immediately refuse to approve the Tinubu administration's request to borrow $24bn. The growing national debt is not sustainable and not in the public interest," the advocacy group stated.

SERAP expressed concern that the burden of debt servicing is already consuming a substantial portion of government revenue, making additional borrowing financially imprudent.

Details of the Loan Request

President Tinubu, in separate letters to both chambers of the National Assembly, is seeking approval for an external borrowing plan of over $21.5 billion (equivalent to N33.39 trillion at the official exchange rate of N1,590 per dollar). Additionally, he has requested approval for a domestic bond issuance of N757.9 billion to offset outstanding pension liabilities.

According to the President, the 2025-2026 borrowing plan covers critical sectors including infrastructure, health, agriculture, education, water supply, security, and employment generation. He stated that the funds are intended to cushion the economic impact of the fuel subsidy removal.

The comprehensive loan package includes $21.5 billion, €2.19 billion, and 15 billion Japanese Yen, along with a €65 million grant. President Tinubu assured lawmakers that the funds would be deployed toward nationwide development projects across the 36 states and the Federal Capital Territory, with a focus on rail, healthcare, and poverty alleviation initiatives.

Nigeria's Growing Debt Profile

Nigeria's public debt has grown significantly in recent years, rising by 48.6% in 2024 to N144.66 trillion, up from N97.34 trillion in 2023. The Federal Government is responsible for approximately 95% of the total debt.

If approved, the new borrowing would push Nigeria's total public debt beyond N180 trillion, raising serious questions about the country's fiscal sustainability and debt servicing capacity.

Regarding the pension component of the request, President Tinubu explained that the proposed bond issuance aims to settle backlogs under the Contributory Pension Scheme, citing years of non-compliance due to revenue constraints. He noted that the plan has received Federal Executive Council approval and is expected to boost retirees' welfare, restore confidence in the pension system, and inject liquidity into the economy.

The National Assembly is yet to respond officially to SERAP's call or indicate how it will proceed with the President's loan request.