posted 27th May 2025
Nigeria’s Tinubu Administration Faces Scrutiny Over New $21.5 Billion Loan Proposal After Clearing $3.4 Billion COVID-19 Debt
LAGOS, 27 May 2025 – Nigeria’s President Bola Tinubu has come under fire as his administration seeks approval for a massive $21.5 billion external borrowing plan, mere weeks after celebrating the repayment of a $3.4 billion COVID-19 loan from the International Monetary Fund (IMF). The move has sparked widespread debate, with critics on social media platforms like X questioning the government’s fiscal strategy and its implications for Nigeria’s already substantial debt burden.
In April 2025, the Tinubu administration announced the full repayment of the $3.4 billion Rapid Financing Instrument (RFI) loan secured in 2020 to mitigate the economic fallout from the COVID-19 pandemic and a sharp decline in oil prices. The IMF confirmed Nigeria’s exit from its debtor list, a milestone hailed by the government as evidence of financial discipline. Finance Minister Wale Edun described the repayment as a step towards fiscal sustainability, stating that the loan was settled “on agreed terms”.
However, the celebratory tone has been short-lived. On Tuesday, President Tinubu submitted a letter to the Senate, requesting approval for a $21.5 billion external borrowing plan as part of the 2025-2026 fiscal framework. The proposal also includes a 15 billion Japanese Yen loan and a 51 million Euro grant, aimed at addressing economic challenges exacerbated by the removal of fuel subsidies. The President argued that the borrowing would fund projects to generate employment, promote entrepreneurship, reduce poverty, and enhance food security.
Public reaction, particularly on X, has been sharply critical. One user remarked, “Tinubu paid off $3.4 billion to the IMF, and his supporters cheered. A week later, he’s borrowing $21 billion, and they’re still defending it. Wild!”. Another post questioned the logic, stating, “Tinubu ALLEGEDLY paid off $3.4b and now plans to borrow $21.5b. Please explain the maths”. These sentiments reflect growing public concern over Nigeria’s rising debt, which stood at $44.9 billion in external debt and N74.38 trillion in domestic debt as of December 2024.
Economists have also weighed in, cautioning against the rapid accumulation of new debt. Emeritus Professor Ndubisi Nwokoma noted that while the IMF loan repayment was a positive step, it does not significantly alter Nigeria’s broader debt challenges. “The big picture is still not a good or desired position,” he said, pointing to the country’s projected 2025 budget deficit of N13 trillion.
The Tinubu administration defends the borrowing, arguing it is necessary to sustain economic reforms initiated since the President took office in May 2023. These reforms, including the removal of fuel subsidies and exchange rate unification, have driven inflation to a 28-year high and intensified Nigeria’s cost-of-living crisis. The government insists that the new loans will support critical infrastructure and social welfare programmes, though details of specific projects remain vague.
Critics, however, argue that the borrowing plan risks entrenching Nigeria’s debt dependency. One X user described it as “a nation on borrowed time,” highlighting the plight of pensioners and others struggling amid economic hardship. Others have questioned the transparency of the process, with one post alleging that the loan repayment was used as “propaganda” to justify further borrowing.
As Nigeria navigates this delicate fiscal terrain, the Tinubu administration faces a tough balancing act: sustaining reform momentum while addressing public discontent over rising debt and economic hardship. The Senate’s decision on the $21.5 billion loan request will likely shape the national discourse in the weeks ahead, with many Nigerians watching closely to see if the government’s promises of socioeconomic development materialise.
