Nigeria’s Revenue Surge Fails to Halt Borrowing Plans as World Bank Approves $1.75bn Loan Pipeline

Nigeria’s Revenue Surge Fails to Halt Borrowing Plans as World Bank Approves $1.75bn Loan Pipeline

Akahi News learnt that the Federal Government is set to ramp up its borrowing despite reporting a significant 40.5 per cent rise in revenue for the first eight months of 2025. This fresh revelation has raised concerns among economists and development experts, who warn that the nation’s rising debt profile could heighten fiscal pressures if not properly managed.

In a statement released on Wednesday, Special Adviser to the President on Information and Strategy, Bayo Onanuga, disclosed that total revenue collections between January and August 2025 climbed to N20.59tn, far surpassing the N14.6tn recorded during the same period in 2024. According to him, non-oil revenues now contribute 75 per cent of Nigeria’s total collections — a development hailed as evidence of growing diversification efforts.

“From January to August 2025, total collections reached N20.59tn, a 40.5 per cent increase from N14.6tn recorded in 2024. This strong performance aligns with projections, placing the government firmly on course to achieve its annual non-oil revenue target,” the statement read.

Contractors Protest Over Unpaid Projects

Akahi News gathered that despite the positive revenue performance, Nigeria continues to struggle with critical funding gaps, particularly in infrastructure spending. On Wednesday, members of the All Indigenous Contractors Association of Nigeria staged a protest at the Ministry of Finance headquarters in Abuja. They demanded payment for projects executed in 2024, which they claimed were worth about N4tn.

In response to these challenges, the government announced plans to borrow both locally and internationally — a decision that contradicts President Bola Tinubu’s recent assurance that Nigeria had already met its 2025 revenue target and would reduce reliance on borrowing to fund its budget.

$1.75bn World Bank Loans in the Pipeline

Further deepening the debate, The PUNCH reported that the World Bank is expected to approve $1.75bn in loans for Nigeria before the end of 2025. According to data from the bank’s website, the loans are aimed at financing several key projects, including agriculture, digital infrastructure, health security, and small business development.

Among the projects is the Nigeria Sustainable Agricultural Value-Chains for Growth, set to receive $500m to boost productivity and rural development. Another $500m will go to the Building Resilient Digital Infrastructure for Growth project, which is expected to enhance the country’s technology ecosystem.

Additionally, $250m is earmarked for the Health Security Programme – Phase II, focused on strengthening Nigeria’s health systems and emergency preparedness. The Fostering Inclusive Finance for MSMEs project will receive $500m to improve credit access for small and medium-sized enterprises.

Rising Debt Profile Raises Concern

Data from the Debt Management Office (DMO) revealed that Nigeria’s total debt to the World Bank rose to $18.23bn as of March 2025, representing about 39.7 per cent of Nigeria’s total external debt stock of $45.98bn. This figure marks a $420m increase since December 2024.

Development economist Dr Aliyu Ilias expressed concern that Nigeria’s debt, which stood at N87tn at the end of former President Muhammadu Buhari’s tenure, has now surged to about N149tn and may approach N180tn if current borrowing trends persist. He argued that the government should be able to fund its capital projects through the reported revenue surge, particularly following the removal of fuel subsidies and increased tax collections.

Economist Adewale Abimbola, however, stated that borrowing in itself is not problematic if loans are concessionary and directed toward projects with clear economic benefits. “Borrowing isn’t bad; what matters is utilisation,” he stressed.

Dr Muda Yusuf of the Centre for the Promotion of Private Enterprise urged the government to ensure debt sustainability by linking loans to projects that generate sufficient revenue to service repayment obligations. He warned that excessive reliance on foreign loans could increase exchange rate risk and undermine fiscal stability if not carefully managed.

Calls for Caution and Transparency

Analysts are calling for greater transparency and prudence in the utilisation of loans, noting that while the funds can support much-needed development, mismanagement could exacerbate Nigeria’s fiscal crisis.

As Nigeria heads towards the final quarter of 2025, all eyes will be on how the Tinubu administration balances its improved revenue performance with its appetite for borrowing — a move that could either unlock growth opportunities or deepen the country’s debt vulnerability.

Akahi News akahinews.org