The President of the Nigeria Labour Congress, Joe Ajaero, has criticised President Bola Tinubu’s request to the National Assembly to approve fresh external loans worth $20.5 billion and €1.45 billion, questioning the need for additional borrowing despite increased government revenue.
Ajaero spoke on Thursday during an appearance on Channels Television’s The Morning Brief, where he said the justification for the proposed loans was unclear to the labour movement.
“If you come out to tell us that the subsidy is gone, that you are making more money and then you are giving more money to states, what is the justification for continually borrowing from the International Monetary Fund and the World Bank and other agencies when there is enough money?” he asked.
The labour leader argued that continued borrowing from the International Monetary Fund, the World Bank and other international agencies was worsening Nigeria’s financial position.
According to him, the country’s rising debt profile was becoming a major threat to its economic stability.
Ajaero also questioned the timing of the loan request, citing the increase in crude oil prices amid the conflict involving the United States and Iran.
He noted that Nigeria’s 2026 budget was prepared using a crude oil benchmark of $70 per barrel, while international prices had risen above $100 per barrel.
“If the 2026 budget was prepared with crude oil price benchmarked at $70 per barrel and now sells above $100 per barrel due to the US-Iran crisis, should this country still be collecting loans?” he asked.
Ajaero maintained that higher oil prices should translate into increased government revenue, particularly for oil-producing states, raising questions about the need for further external borrowing.
He also clarified that the NLC did not have the authority to approve government loans and was not directly involved in determining when borrowed funds were released to the government.
The labour leader called on Nigerians and relevant institutions to demand explanations from the government over its borrowing plans.
He added that the National Assembly could prevent the proposed borrowing by rejecting the request.
The latest loan proposal has intensified debate over the Tinubu administration’s fiscal policies and Nigeria’s growing debt burden.
In April, Channels Television reported that the Nigerian 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 administration has faced criticism over its continued reliance on borrowing following the removal of the petrol subsidy, a policy expected to free up public funds for development.
In April, the presidential candidate of the Nigeria Democratic Congress, Peter Obi, warned that Nigeria was heading towards a debt crisis. He questioned the government’s continued borrowing despite the subsidy removal and raised concerns about outstanding payments to contractors and the implementation of capital projects.
The Emir of Kano, Muhammadu Sanusi II, also questioned the government’s borrowing plans after the removal of petrol subsidies, arguing that Nigerians should see the benefits of the policy through improved public finances.
However, the Nigerian Government has defended its borrowing strategy, maintaining that the funds are intended to finance critical infrastructure and other development priorities.