The $64 Oil Benchmark and the Borrowing Paradox: An Exposé on Tinubu’s Debt Surge
In the 2026 Federal Budget, President Bola Tinubu anchored Nigeria’s fiscal planning on a crude oil price benchmark of $64.85 per barrel. Yet, as of September 2026, Brent crude is trading between $106–$108 per barrel, creating a windfall of over $40 per barrel above the budget assumption. Despite this unexpected stroke of good fortune, coupled with the removal of fuel subsidies and increased tax revenues, the Tinubu administration has continued to borrow at what critics describe as a “crazy rate”, pushing Nigeria’s public debt to ₦166.79 trillion by June 2026.
This piece unpacks the full scale of loans and credit facilities secured since Tinubu took office in May 2023, the institutions involved, and the troubling contradictions between soaring revenues and escalating borrowing.
The Oil Windfall That Should Have Changed Everything
Nigeria’s 2026 budget was built on conservative assumptions: $64.85 per barrel for crude oil and 1.84 million barrels per day for production. But reality has been far more generous. With Brent crude hovering around $107–$108, the country is earning significantly more from every barrel exported. In Q2 2026 alone, crude export revenues hit ₦12.91 trillion, accounting for nearly 48% of total exports.
Under normal fiscal logic, this windfall—combined with the ₦15.8 trillion saved from fuel subsidy removal between June 2023 and December 2025—should have reduced borrowing, strengthened the naira, and funded critical infrastructure. Instead, the opposite has happened.
The Borrowing Spree: A Timeline of Loans and Credit Facilities
Since May 2023, the Tinubu administration has overseen an unprecedented accumulation of debt. Below is a comprehensive breakdown of major loans and credit facilities, along with the issuing institutions:
External Loans (Multilateral & Bilateral)
| Institution | Amount (USD) | Amount (NGN approx.) | Date Approved | Purpose |
|---|---|---|---|---|
| World Bank | $11.4 billion total (multiple tranches) | ~₦17.1 trillion | June 2023 – June 2026 | Power sector recovery, education, health, human capital, renewable energy, economic reforms |
| Afreximbank | $3 billion | ~₦4.8 trillion | August 2023 | Naira stabilization, secured against future oil royalties |
| Africa Development Bank (AfDB) | $1 billion ($500m + $500m) | ~₦1.5 trillion | 2023–2024 | Developmental projects |
| First Abu Dhabi Bank (UAE) | $5 billion (Total Return Swap) | ~₦7.5 trillion | March 2026 (first tranche $1.5bn accessed June 2026) | Budget financing, collateralized with Naira securities |
| UK Export Finance | $1 billion | ~₦1.5 trillion | March 2026 | Lagos Port Complex and Tin Can Island Port rehabilitation |
| Deutsche Bank AG | $8.97 million | ~₦13.5 billion | 2026 | Unspecified (part of swap arrangements) |
| Paris Club / London Club | Restructuring and new facilities | Included in external debt stock | Ongoing | Debt restructuring and new credit lines |
Domestic Loans
| Instrument | Amount (NGN) | Period | Purpose |
|---|---|---|---|
| FGN Bonds & Treasury Bills | ₦20.1 trillion | June 2023 – May 2024 | Deficit financing, recurrent expenditure |
| Ways and Means Securitisation | ₦30 trillion total (₦22.7trn Buhari + ₦7.3trn Tinubu) | December 2023 | Conversion of CBN overdrafts into long-term debt |
| Pension Liability Bonds | ₦757.98 billion | May 2025 | Clearing pension debts under Contributory Pension Scheme |
| Foreign Currency-Denominated Domestic Bonds | $2 billion (~₦3.2 trillion) | 2025–2026 | FX-denominated domestic borrowing |
| Additional Domestic Borrowing (Jan–Aug 2026) | ₦24.7 trillion | First 8 months of 2026 | Deficit financing, debt servicing, capital expenditure |
Total Debt Accumulated Under Tinubu (May 2023 – June 2026)
- Public debt inherited (March 2023): ₦49.85 trillion
- Public debt as of June 2026: ₦166.79 trillion
- Net increase under Tinubu: ₦116.94 trillion (approximately $80 billion at current rates)
This represents a 234% increase in just over three years.
The Contradiction: High Revenues, Higher Borrowing
The most alarming aspect of this borrowing surge is the context in which it is happening:
- Fuel Subsidy Removal: The government saved ₦15.8 trillion from subsidy removal between June 2023 and December 2025.
- Tax Reforms: Federal revenue jumped from ₦16.8 trillion (2023) to ₦31.9 trillion (2024), with further increases in 2025–2026.[26]
- Oil Windfall: With Brent crude at $106–$108, Nigeria is earning $40+ per barrel above the budget benchmark.
- Exchange Rate Float: The naira’s depreciation has increased the nominal value of FX-denominated revenues.
Yet, despite these massive revenue inflows, the government borrowed an additional ₦11.9 trillion between June 2023 and December 2025, and ₦24.7 trillion in just the first eight months of 2026 alone.
Where Is the Money Going?
According to government disclosures and analyst reports, the borrowed funds are being channeled into:
- Debt Servicing: In 2026, Nigeria will spend $11.6 billion (≈₦17.4 trillion) on debt servicing—nearly half of projected government revenue.
- Recurrent Expenditure: Wage adjustments, minimum wage increases, and allowances for public servants consumed ₦9.39 trillion of the reform savings.
- Infrastructure: Only ₦6.5 trillion of the ₦20.4 trillion reform savings went into “strategic infrastructure”.
- FX Exposure Mitigation: Some borrowing is FX-denominated but sourced domestically to limit foreign exchange risk.
In essence, 58% of the ₦20.4 trillion reform savings came from borrowing, 27% from subsidy savings, and 15% from other revenue. This reveals a disturbing pattern: revenue gains are being absorbed by debt servicing and recurrent costs, forcing even more borrowing to fund capital projects.
The Human Cost: Taxes Up, Subsidies Gone, Debt Soaring
For ordinary Nigerians, the arithmetic is brutal:
- Fuel subsidies are gone, leading to petrol prices above ₦600 per litre in many states.
- Taxes have increased across VAT, customs duties, and corporate levies.
- Inflation remains above 30%, eroding purchasing power.
- Public debt per citizen has surged from approximately ₦240,000 (2023) to over ₦800,000 (2026).
As former Vice President Atiku Abubakar put it in September 2026: “A government that says more money is coming in must explain why it keeps borrowing and why the people paying for its policies cannot see the promised gains.”
The Alarming Reality: A Debt Trap in Plain Sight
The Tinubu administration’s defense is that “borrowing is not leprosy” and that debt is necessary to bridge the infrastructure gap. But the numbers tell a different story:
- Debt-to-GDP ratio has climbed from 39.8% (Q3 2023) to over 52% (2024) and continues to rise.
- Debt servicing now consumes 45–50% of government revenue, crowding out spending on health, education, and security.
- Domestic borrowing is crowding out private sector credit, with businesses suffering as government absorbs liquidity.
- External debt has risen from $42.49 billion (Dec 2023) to $51.86 billion (Dec 2025), with more expected.
The irony is stark: Nigeria is borrowing more despite having more money than ever before. The oil windfall, subsidy savings, and tax reforms have not reduced borrowing—they have enabled even higher expenditure, which in turn demands even more borrowing.
In conclusion:
The 2026 budget’s $64 oil benchmark was supposed to be a conservative anchor. Instead, it has become a symbol of fiscal disconnect. With Brent crude at $106–$108, Nigeria should be experiencing a fiscal boom. Instead, it is drowning in debt.
The question no longer is whether Nigeria can afford to borrow—it is whether Nigeria can afford not to stop borrowing. Until the government provides a transparent, itemized account of how every loan has been spent and why borrowing continues despite record revenues, the suspicion of fiscal recklessness will only grow.
As one editorial put it: “There is a certain tragedy in watching a nation articulate its own contradictions in public.” Nigeria is living that tragedy in real time.