Economy
Debt crisis pushes Nigeria towards fiscal cliff—CISLAC
Civil Society Legislative Advocacy Centre, CISLAC, has raised alarm over Nigeria’s debt crisis pushing Nigeria towards a fiscal cliff as the situation is now precarious. Speaking at a press conference on the dangerous situation Nigeria and Nigerians find themselves, the Executive Director, CISLAC, Auwal Ibrahim Rafsanjani, said “barely two decades after the Buyback deal by the then President Olusegun Obasanjo, from the Paris Club debt relief agreement, Nigeria is already in another debt crisis, with an inevitable human cost.” Rafsanjani presenting a report titled ‘The Role of Private Creditors in Nigeria’s Debt Crisis, and the Human Cost; A Reflection on the Policy Options for Addressing the Nigeria Debt Crisis’, said the way things are now, the country is bleeding and lying prostrate in need of resuscitation.
The report was supported by ChristianAid. He also stated that unfortunately, all presidential candidates have failed to tell Nigerians how they will end Nigeria’s debt crisis, rather are engaged in insulting themselves under the cover of campaign. He said that Nigeria can survive and solve its problems with the endowments God has blessed it with, hence no need to go abroad to private creditors for loans that do not impact the lives of Nigerians, which he referred to the late Head of State, General Sani Abacha, whose government at no time went abroad to take loan and Nigeria survived without borrowing, and that a well-meaning Nigerian leader can also do same and the country will make progress instead of being gag by huge indebtedness. The report highlighted policy options for addressing Nigeria’s debt crisis, there is the urgent need to; Promote effective management; The need for increased tax effort, the need for public debt auditing; Need for realistic debt management model; A need for progressive tax reform, and Improve public debt management. He said “with limited access to further financing on concessional terms, and with a growing presence and influence of private creditors in its debt profile, Nigeria’s national debt is growing and increasingly putting the country in a precarious situation, with significant implications for human rights, including education, health, climate change mitigation and adaptation.
“A growing proportion of external debt owed to private creditors under opaque terms and often subject to high interest rates is contributing to spiralling debt servicing costs, increasing the risks to Nigeria’s economy. We are deeply concerned with the lack of vigorous scrutiny and attention by the law makers in granting requests for loans without reflecting the provisions of the Fiscal Responsibility Act, and the greater implication for the nation’s economic state. Often times, it is not always to the interest of the people borrowing from private creditors at a very exorbitant interest rate. The Nigerian legislators have the constitutional and legislative mandate to approve loan requests only on the basis of public interest and should put this clause as a prerequisite to any approvals they might want to give to the president’s requests for further borrowings. We have launched a research product that centres on revealing and challenging the role of private creditors in hindering people’s recoveries to enhance the urgency with which the international community must address sovereign debt crises.
“This research was commissioned with support from Christian Aid, to fully highlight the Nigerian context and dimensions of the indebtedness to private creditors for policy options and deliberate efforts to end it. It aims to contribute to an international financial architecture and macroeconomic environment that enables the fulfilment of human rights and the undertaking of climate action in economies that centre on care. We believe that the timing is auspicious to intensify the urgency for adequate responses by relevant actors within the debt financing ecosystem that will contribute to cushioning this worsening economic crisis. We call on all state and non-state actors to heed this call and mobilise collective actions to nip this issue in the bud as we head towards a fiscal cliff, in the interests of the increasing population of poor Nigerians whose lives are affected by the crisis.” He said that there is lack of transparency in lending more generally, which is a barrier to holding governments accountable for debts they incur alongside the deep economic impacts of the Covid-19 pandemic and the associated fiscal constraints. He lamented that , “A major contributor to this increased public debt levels has been the unprecedented influx of private lenders flooding developing economies, as they look for higher returns outside advanced economies following the global financial crisis of 2008.
“According to the Debt Management Office (DMO), Nigeria’s Total Public Debt Stock as of June 30, 2022 was N42.84trillion ($103.31billion). It is instructive to recall that Nigeria’s debt service cost presently outweighs its revenue with clear signs of economic dangers ahead. There are implications for this rising debt stock in Nigeria with total external debts amounting to about $40billion and a private credit composition of $15.9billion which represents 39.8 per cent of total external debt stock. Eurobonds take the bulk of the commercial loans with a total portfolio of $15.62 billion.”
The Arab Africa Trade Bridges (AATB) Program and the Federal Republic of Nigeria formalized a partnership with the signing of the AATB Membership Agreement, officially welcoming Nigeria as the Program’s newest member country. The signing ceremony took place in Abuja on the sidelines of the 5th AATB Board of Governors Meeting, hosted by the Federal Government of Nigeria.
The Membership Agreement was signed by Eng. Adeeb Y. Al Aama, the CEO of the International Islamic Trade Finance Corporation (ITFC) and AATB Program Secretary General, and H.E. Mr. Wale Edun, Minister of Finance and Coordinating Minister of the Economy, Federal Republic of Nigeria. The Agreement will provide a strategic and operational framework to support Nigeria’s efforts in trade competitiveness, promote export diversification, strengthen priority value chains, and advance capacity-building efforts in line with national development priorities. Areas of collaboration will include trade promotion, agribusiness modernization, SME development, businessmen missions, trade facilitation, logistics efficiency, and digital trade readiness.
The Honourable Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, called for deeper trade collaboration between African and Arab nations, stressing the importance of value-added Agribusiness and industrial partnerships for regional growth. Speaking in Abuja at the Agribusiness Matchmaking Forum ahead of the AATB Board of Governors Meeting, the Minister said the shifting global economy makes it essential for African and Arab nations to rely more on regional cooperation, investment and shared markets.
He highlighted projections showing Arab-Africa trade could grow by more than US$37 billion in the next three years and urged partners to prioritize value addition rather than raw commodity exports. He noted that Nigeria’s growing industrial base and upcoming National Single Window reforms will support efficiency, investment and private-sector expansion.
“This is a moment to turn opportunity into action”, he said. “By working together, we can build stronger value chains, create jobs and support prosperity across our regions”, Edun emphasized. “As African and Arab nations embark on this journey of deeper trade collaboration, the potential for growth and development is vast. With a shared vision and commitment to value-added partnerships, we can unlock new opportunities, drive economic growth, and create a brighter future for our people.”
Speaking during the event, Eng. Adeeb Y. Al Aama, Chief Executive Officer of ITFC and Secretary General of the AATB Program, stated: “We are pleased to welcome Nigeria to be part of the AATB Program. Nigeria stands as one of Africa’s most dynamic and resilient economies in Africa, with a rapidly expanding private sector and strong potential across agribusiness, energy, manufacturing, and digital industries. Through this Membership Agreement, we look forward to collaborating closely with Nigerian institutions to strengthen value chains, expand regional market access, enhance trade finance and investment opportunities, and support the country’s development priorities.”
The signing of this Agreement underscores AATB’s continued engagement with African countries and its evolving portfolio of programs supporting trade and investment. In recent years, AATB has worked on initiatives across agribusiness, textiles, logistics, digital trade, export readiness under the AfCFTA framework, and other regional initiatives such as the Common African Agro-Parks (CAAPs) Programme.
With Nigeria’s accession, the AATB Program extends it’s presence in the region and adds a key partner working toward advancing trade-led development and fostering inclusive economic growth.
Federal Executive Council (FEC) has approved the 2026–2028 Medium-Term Expenditure Framework (MTEF), a key fiscal document that outlines Nigeria’s revenue expectations, macroeconomic assumptions, and spending priorities for the next three years. The approval followed Wednesday’s FEC meeting presided over by President Bola Tinubu at the State House, Abuja. The Minister of Budget and Economic Planning, Senator Atiku Bagudu made this known after the meeting.
The Minister said the Federal Government is projecting a total revenue inflow of N34.33 trillion in 2026, including N4.98 trillion expected from government-owned enterprises. Bagudu said that the projected revenue is N6.55 trillion lower than earlier estimates, adding that federal allocations are expected to drop by about N9.4 trillion, representing a 16% decline compared to the 2025 budget.
He said that statutory transfers are expected to amount to about N3 trillion within the same fiscal year. On macroeconomic assumptions, FEC adopted an oil production benchmark of 2.6 million barrels per day (mbpd) for 2026, although a more conservative 1.8 mbpd will be used for budgeting purposes. An oil price benchmark of $64 per barrel and an exchange rate of N1,512 per dollar were also approved.
Bagudu said the exchange rate assumption reflects projections tied to economic and political developments ahead of the 2027 general elections. He said the exchange rate assumption took into account the fiscal outlook ahead of the 2027 general elections.
The minister said that all the parameters were based on macroeconomic analysis by the Budget Office and other relevant agencies. Bagudu said FEC also reviewed comments from cabinet members before approving the Medium-Term Fiscal Expenditure Ceiling (MFTEC), which sets expenditure limits. Earlier, the Senate approved the external borrowing plan of $21.5 billion presented by President Tinubu for consideration The loans, according to the Senate, were part of the MTEF and Fiscal Strategy Paper (FSP) for the 2025 budget.
The spot rate on Nigerian Treasury bills has been increased by 146 basis points by the Central Bank of Nigeria (CBN) following tight subscription levels at the main auction on Wednesday. The spot rate on Treasury bills with one-year maturity has now surpassed Nigeria’s 16.05% inflation by 145 basis points following a recent decision to keep the policy rate at 27%.
The Apex Bank came to the primary market with N700 billion Treasury bills offer size across standard tenors, including 91-day, 182-day and 364 day maturities. Details from the auction results showed that demand settled slightly above the total offers as investors began to seek higher returns on naira assets despite disinflation.
Total subscription came in at about N775 billion versus N700 billion offers floated at the main auction. The results showed rising appetite for duration as investors parked about 90% of their bids on Nigerian Treasury bills with 364 days maturity. The CBN opened N100 billion worth of 91 days bills for subscription, but the offer received underwhelming bids totalling N44.17 billion.
The CBN allotted N42.80 billion for the short-term instrument at the spot rate of 15.30%, the same as the previous auction. Total demand for 182 days Nigerian Treasury bills settled at N33.38 billion as against N150 billion that the authority pushed out for subscription. The CBN raised N30.36 billion from 182 days bills allotted to investors at the spot rate of 15.50%, the same as the previous auction.
Investors staked N697.29 billion on N450 billion in 364-day Treasury bills that was offered for subscription. The CBN raised N636.46 billion from the longest tenor at the spot rate of 17.50%, up from 16.04% at the previous auction.
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