By Seun Ibiyemi
Nigeria’s domestic debt profile has risen to about ₦79.90 trillion following the Senate’s approval of President Bola Tinubu’s request to obtain a fresh ₦1.15 trillion loan from the domestic debt market.
The loan is intended to partially finance the ₦14.10 trillion deficit in the 2025 national budget, as part of the government’s efforts to sustain ongoing economic and infrastructure program.
The upper chamber gave its approval on Wednesday after adopting the report of the Senate Committee on Local and Foreign Debt, which reviewed the President’s request.
Presenting the committee’s report, the Chairman explained that the 2025 Appropriation Act provides for a total expenditure of ₦59.99 trillion, representing an upward review of ₦5.25 trillion from the ₦54.74 trillion initially proposed by the Executive.
The committee further noted that the increase in spending widened the budget deficit to ₦14.10 trillion, out of which ₦12.95 trillion had previously been approved for borrowing.
The newly approved ₦1.15 trillion domestic loan, therefore, seeks to bridge the remaining funding gap.
According to the Debt Management Office (DMO), Nigeria’s domestic debt stood at ₦78.75 trillion as of the end of the first quarter of 2025.
With the latest approval, the figure is expected to climb to about ₦79.90 trillion, reflecting a steady rise in the nation’s debt stock.
Lawmakers who supported the borrowing argued that the loan is necessary to ensure the effective implementation of the 2025 budget, particularly in the face of fiscal pressures and revenue shortfalls. They stressed that the new borrowing would enable the government to meet critical obligations, including infrastructure financing, social welfare programmes, and public sector reforms.
However, some senators expressed concern about the country’s growing debt burden, warning that continued reliance on borrowing could undermine fiscal stability and increase the cost of debt servicing.
Nigeria’s total public debt comprising both domestic and external borrowings has grown sharply in recent years, largely due to revenue constraints, rising subsidy costs, and increased government spending on security and infrastructure.
Fiscal experts have urged the government to pair borrowing with aggressive revenue mobilisation strategies, including broadening the tax base, improving efficiency in revenue collection, and curbing wasteful expenditure.
The new domestic loan approval is part of President Tinubu’s broader fiscal framework aimed at financing the 2025 budget deficit while supporting key sectors such as manufacturing, agriculture, energy, and transport.