$6bn loan approval to push Nigeria’s debt profile to N195 trn

President Bola Tinubu has secured National Assembly approval for $6 billion in fresh foreign loans, a move set to push Nigeria’s total debt stock past N195 trillion amid warnings from the IMF regarding high debt vulnerabilities in low-income nations.

The National Assembly on Tuesday, March 31, 2026, granted an “urgent approval” to President Bola Ahmed Tinubu’s request for over $6 billion in new foreign loans, a move projected to increase Nigeria’s total debt stock to a record N195 trillion. The borrowing plan was outlined in two separate letters to the Senate and the House of Representatives, detailing a $5 billion structured Total Return Swap (TRS) from the First Abu Dhabi Bank in the United Arab Emirates and a $1 billion export credit facility from Citibank London, backed by UK Export Finance (UKEF). According to the President, the $5 billion facility is designated for budget implementation and the refinancing of more expensive existing debts, while the $1 billion loan is specifically earmarked for the comprehensive “rehabilitation of Lagos Port Complex and Tin Can Island Port” to improve safety and efficiency.

The rapid legislative approval came despite a simultaneous warning from the International Monetary Fund (IMF), which expressed deep concerns over the “high debt vulnerabilities” and rising domestic borrowing costs currently facing low-income countries. Daily Trust reports that the $5 billion loan alone will see the country’s external debt stock jump from $110.3 billion to $115.3 billion. To secure the Abu Dhabi facility, the President noted that the federal government would utilize Naira-denominated securities as collateral. This strategy is intended to support fiscal liquidity management, though critics point out that the growing reliance on foreign lenders could further strain the country’s debt-service-to-revenue ratio, which already consumes a significant portion of the national budget.

While the administration maintains that the loans are essential for “non-oil trade diversification” and positioning Nigeria as a regional trade hub, the rising debt ceiling has reignited debates over fiscal sustainability. The $1 billion port project, in particular, is aimed at addressing “critical deficiencies” in the nation’s busiest maritime gateways to boost functionality and revenue generation. However, with the total public debt projected to hit N195 trillion upon the full drawdown of these tranches, financial analysts warn that the government must balance its infrastructure ambitions with the reality of an increasingly heavy repayment burden. The Senate Committee on Local and Foreign Debts, led by Senator Aliyu Wamakko, had recommended the approval after a swift review, stating the funds were necessary for the “development of key infrastructure projects” prioritized by the current administration.

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