Nigeria’s Federal Government says it will still borrow to fund key projects, despite recording a sharp increase in revenue.
Figures released by the Presidency on Wednesday showed that collections between January and August 2025 hit ₦20.59tn. This marks a 40.5% jump from ₦14.6tn collected in the same period of 2024.
Non-oil revenue now accounts for 75% of total inflows, driven by taxes, customs, and levies. “From January to August 2025, total collections reached ₦20.59tn… placing the government firmly on course to achieve its annual non-oil revenue target,” Bayo Onanuga, presidential aide, said.
But despite this record, government contractors say they remain unpaid. Members of the All Indigenous Contractors Association protested at the Ministry of Finance in Abuja on Wednesday, demanding ₦4tn for 2024 capital projects.
President Bola Tinubu had earlier claimed Nigeria had already met its 2025 revenue target ahead of schedule and would not need more borrowing. Yet officials now say funding shortfalls in infrastructure and social programmes make fresh borrowing unavoidable.
The World Bank is expected to approve $1.75bn in loans before the end of the year. According to the bank’s website, the loans will fund agriculture, health, technology, and small business financing.
Projects Awaiting World Bank Funding
The Nigeria Sustainable Agricultural Value-Chains for Growth project will receive $500m to boost rural productivity and link farmers to markets.
Another $500m will go into building digital infrastructure, with approval expected in October. A health programme designed to improve Nigeria’s pandemic readiness will secure $250m by September.
Small businesses are also in focus, with $500m set aside for MSME financing. These projects are part of the $8.40bn already approved by the World Bank for Nigeria between June 2023 and August 2025.
Economists say the loans are mostly concessionary, with lower rates and longer repayment periods than commercial borrowing. Lagos-based analyst Adewale Abimbola said: “Borrowing isn’t bad; what matters is utilisation.”
But others are worried. Dr Aliyu Ilias recalled that Nigeria’s debt stock rose from about ₦87tn under Buhari to nearly ₦149tn under Tinubu, and could soon hit ₦180tn. He warned that debt servicing now crowds out capital spending, limits jobs, and fuels inflation.
The Debt Management Office confirms Nigeria’s debt to the World Bank rose to $18.23bn as of March 2025, up $420m in three months. That means the Bank now accounts for 81.2% of Nigeria’s total multilateral debt.
Dr Muda Yusuf of CPPE said the problem is not borrowing itself but debt sustainability. Without strong revenue to repay, Nigeria risks “a vicious cycle of borrowing to service existing loans.”
Should Nigeria keep borrowing despite its higher revenues, or is it time to break the debt cycle? Are we getting inexorably into the debt trap blindly?
For more on Nigeria’s debt and borrowing trends, visit the World Bank.
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