Tinubu’s Promise to Reduce Nigeria’s Reliance on Loans Falls Short as External Debt Hits $42.9 Billion
President Bola Tinubu’s administration has failed to deliver on its promise to reduce Nigeria’s reliance on loans and debts
Despite his August 2023 pledge to end the country’s vicious cycle of borrowing, Nigeria’s external debt has surged to $42.901 billion as of June 2024.
The public debt profile has grown by N46.9 trillion within a year, from N87.3 trillion in June 2023 to N134.2 trillion in June 2024. Domestic debt also increased from N48.3 trillion to N66.9 trillion during the same period.
The World Bank has approved multiple loans for Nigeria, including $500 million in December 2024 and $1.5 billion for tax reforms and fuel subsidy removal.
This brings the total loans secured from the World Bank to 12, with previous loans focusing on women empowerment, girl’s education, renewable energy, economic stabilization reforms, and resource mobilization reforms.
Nigeria’s substantial debt burden has resulted in significant servicing expenditures, limiting the government’s ability to allocate funds towards essential development projects.
A whopping N7.9 trillion was spent on debt servicing between the first and third quarters of 2024, accounting for approximately 50% of the total expenditure and 162% of the total revenue generated during the first half of 2024.
The country’s infrastructural deficits, particularly in healthcare, education, and roads, have severely impacted economic growth and quality of life. Estimates suggest that Nigeria requires between $100 to $150 billion annually for the next decade to bridge the gap.
