Another $7.7bn Loan?

With barely ten weeks to the January 16 presidential election, President Bola Tinubu has returned to the National Assembly with yet another request to borrow. In a letter dated October 26 and read on the floor of the Senate, the President asked lawmakers to approve a fresh external loan of $7.707 billion, about N10.79 trillion at the budget benchmark rate of N1,400 to the dollar, to part-finance the 2026 budget deficit.

The new request replaces an earlier one, presented to the Senate on October 27, for $20.52 billion and €1.045 billion. That a government can swing from more than $21 billion to under $8 billion inside one week should worry every Nigerian.

Senate President Godswill Akpabio has welcomed the revised letter as more explicit than the one it supersedes, and the request has been referred to the Senate Committee on Local and Foreign Debts. The President has anchored his request on Sections 21(1) and 27(1) of the Debt Management Office (Establishment, etc.) Act, 2003, and on the borrowing envelope the National Assembly itself approved in the 2026 Appropriation Act. That Act authorised new borrowing of N29.2 trillion to finance a projected deficit of N31.4 trillion, split into N18.4 trillion domestic and N10.79 trillion external. On paper, then, the request is lawful. Legality, however, has never been the only test of prudence.

The first difficulty is the haste and confusion that surround it. A borrowing plan that shrinks by almost two-thirds in a matter of days raises questions the Presidency has not answered. Was the first request poorly prepared, or was it a trial balloon floated to test the reaction of lawmakers and the public? Which projects were dropped between the two letters, and why? A finance ministry that cannot settle on how much it needs within the same month invites the suspicion that the figures are being worked out after the decision to borrow has already been taken. Nigerians deserve better planning than this from those who manage their purse.

The second difficulty is cost. By the President’s own admission, because the loan will be raised largely through Eurobonds and other market instruments, the final interest rates, tenor and repayment terms can only be known at the point of pricing. In plain terms, the National Assembly is being asked to sign a cheque whose value nobody can yet tell. Eurobonds are quick to raise, which is why the government prefers them, yet they are among the costliest forms of debt available to a country with Nigeria’s credit rating. Every percentage point on the coupon will be paid by Nigerians long after the officials who contracted the loan have left office.

That burden is already heavy. According to the Debt Management Office, the country’s total public debt stood at N159.28 trillion at the end of 2025. Debt service alone took about N16 trillion that year, and the 2026 budget sets aside N15.81 trillion, nearly a quarter of the N68.32 trillion appropriation, for the same purpose. Earlier this year, lawmakers approved a $6 billion external borrowing plan in March and, months later, a $516.3 million Deutsche Bank facility for the Sokoto–Badagry Superhighway. A nation that hands this much of its income to creditors has less left for schools and hospitals, and each new loan tightens the squeeze.

Needless to say, borrowing is not a sin in itself. Every serious economy borrows, and a loan that builds a power plant or a seaport can pay for itself many times over. The problem in Nigeria has always been the distance between the money borrowed and what citizens can see for it. Too many loans have ended up funding recurrent spending, paying for projects that were never completed or vanishing into contracts nobody can audit. Until the government can show, project by project, what earlier borrowings have delivered, its appeals for fresh credit will continue to meet public scepticism.

Timing makes the matter more delicate. The administration is ten weeks from an election in which the President is seeking a second term. A loan of this size, approved in the heat of electioneering, will inevitably raise fears that some of the proceeds could find their way into politically motivated spending. We make no such allegation, but the burden of proof rests on the government to show otherwise. Whoever wins in January will inherit the repayments, and a government on its way to the polls should be careful not to bind its successor, even if that successor turns out to be itself, to obligations negotiated without full scrutiny.

The Presidency has argued that the proceeds will be received by the Central Bank of Nigeria on behalf of the Federal Government, with a side benefit to the external reserves and the stability of the naira. That argument deserves a careful hearing, yet it also exposes a worrying habit of using borrowed dollars to prop up the currency instead of earning them through exports and production. Reserves built on debt are rented reserves. The lasting path to a stable naira lies in earning more from exports and collecting the revenue the country already loses to leakages and weak tax administration.

The National Assembly must not treat this decision as a formality. The Committee on Local and Foreign Debts should demand, and publish, a complete list of the projects the loan will fund, the amount allocated to each, the proposed lenders, the expected range of interest rates and a credible repayment plan. It should also ask for an account of how this year’s earlier external loans have been spent. Lawmakers who wave such a request through without these details will share the blame for whatever follows.

The opposition, through the African Democratic Congress ( ADC) presidential candidate,Atiku Abubakar, has called for the request to be rejected outright. We do not go that far, since the deficit is already written into law and must be financed somehow. Approval, however, must come with conditions, and those conditions must be made public. Nigerians are entitled to know what they are borrowing, from whom, at what price and for what purpose, before their children are made to pay for it.

A country that borrows in the dark will repay in broad daylight.