The Nigerian Senate has approved President Bola Tinubu's request to borrow N1.15 trillion from the domestic debt market. The move aims to cover a funding gap in the 2025 budget .
The approval came on Wednesday after the Senate considered a report from its Committee on Local and Foreign Debt . The committee had reviewed the President's request, which was first sent to the National Assembly on November 4 .
The need for this loan stems from changes made to the 2025 budget by lawmakers. The legislature passed a N59.99 trillion appropriation act. This figure was N5.25 trillion higher than the N54.74 trillion spending plan originally proposed by the executive branch . This expansion created a total budget deficit of N14.10 trillion . While N12.95 trillion had already been approved for borrowing, it left an unfunded shortfall of N1.15 trillion . The new loan is intended to close this gap and ensure full implementation of government projects .
In a related development, the Senate has also moved to tighten oversight on how the borrowed funds will be used. A motion was adopted directing the Senate Committee on Appropriations to intensify its monitoring role . This is to ensure the money is used strictly for its intended purposes in the 2025 fiscal year .
The debate on this loan request occurred against a backdrop of broader fiscal concerns. A separate report indicates the Federal Government has already borrowed N17.36 trillion from domestic and foreign sources in the first ten months of 2025 . This amount is N6.06 trillion, or 55.6 percent, higher than the prorated borrowing target for that period as set in the 2025 budget .
Financial experts have warned that this level of borrowing poses risks to the economy. They say excessive government borrowing can crowd out the private sector . When the government takes on large amounts of credit, it can make it harder and more expensive for businesses to get loans. This can slow down investment, job creation, and economic growth . Analysts have described the situation as a sign of fiscal indiscipline. They note it conflicts with goals of fiscal consolidation and raises concerns about debt sustainability .
The recent protest by local contractors also highlighted immediate pressures on the government's finances. Members of the All Indigenous Contractors Association of Nigeria (AICAN) had stormed the National Assembly complex. They protested the government's failure to pay billions of naira owed for projects already completed . During the plenary, Senate President Godswill Akpabio acknowledged that part of the newly approved loan would be used to settle these local contractors . The contractors claim the government owes them about N760 billion for verified projects, with some estimates of total outstanding obligations exceeding N4 trillion .
With this new approval, the Senate has moved to ensure that funding gaps do not hinder the implementation of the 2025 budget . The government maintains the loan is necessary to fund its programs and projects . However, the continued reliance on borrowing to finance budgets continues to spark debate about Nigeria's long-term fiscal health and debt management strategies .