The Nigeria Labour Congress (NLC) has expressed concerns over the Federal Government's plan to seek fresh external loans worth $20.5 billion and €1.45 billion. NLC President, Joe Ajaero, raised the concerns on Thursday while speaking on Channels Television's The Morning Brief. He questioned the basis for the proposed loans, citing the removal of petrol subsidy and rising oil prices. Ajaero demanded an explanation for the continued borrowing despite the government's claims of increased revenue.
Ajaero argued that Nigeria's growing debt profile was putting pressure on the country. He questioned why the government would continue borrowing when crude oil prices had risen above the benchmark used for the 2026 budget. The budget had been prepared with crude oil benchmarked at $70 per barrel, but now sells above $100 per barrel due to the US-Iran crisis. Ajaero asked if the country should still be collecting loans under these circumstances.
The labour leader also criticised international lenders, including the International Monetary Fund and the World Bank. He argued that their continued lending to Nigeria was not helping the country address its debt burden. Ajaero urged Nigerians and relevant institutions to demand answers about the new borrowing request. He added that the National Assembly could stop the process by rejecting it.
Ajaero clarified that the NLC does not approve government loans and does not determine when borrowed funds are released to the Federal Government. He called on the National Assembly to scrutinise the request and reject it if necessary. According to Ajaero, if the National Assembly rejects the loan, the Federal Government will not get any loan.
The latest request has renewed debate over the Tinubu administration's borrowing strategy and the country's rising debt burden. In April, the Federal Government increased its planned borrowing for 2026 by ₦11.31 trillion to ₦29.20 trillion. The government also projected a fiscal deficit of ₦31.46 trillion and debt-servicing costs of ₦15.81 trillion.
The continued reliance on loans has drawn criticism from political figures and other public voices. In April, Peter Obi, presidential candidate of the Nigeria Democratic Congress, warned that the country was heading towards a debt crisis. He also raised concerns about outstanding payments to contractors and the implementation of capital projects.
The Federal Government has defended its borrowing strategy, maintaining that the funds are intended to support critical infrastructure and other development priorities. However, critics argue that the country should see the benefits of the policy through improved public finances. The Emir of Kano, Muhammadu Sanusi II, questioned why the government continued borrowing after ending fuel subsidy payments.
Key points
- The Nigeria Labour Congress is questioning the government's decision to seek fresh external loans worth $20.5 billion and €1.45 billion.
- The labour union argues that Nigeria's growing debt profile is putting pressure on the country.
- The National Assembly has the power to reject the loan request and stop the borrowing process.
