"Mice are mice; that’s why mousetraps work."
 

Once again, President Bola Tinubu has asked the National Assembly to approve a substantial external loan—this time, to the tune of $24.14 billion. For many Nigerians, this feels like déjà vu, and it's easy to understand why. With debt levels rising and the economy still on shaky ground, it appears the country is edging closer to a financial cliff.

A national newspaper editorial on June 1, 2025, accurately warned about the risks of this borrowing spree. But it was mistaken in claiming that government revenue is recovering. When measured in dollars—not naira—the reality is bleak. Nigeria’s dollar income is falling short of expectations, and that’s why the federal government is back on the hunt for loans. VANGUARD had already predicted this outcome earlier this year.

A Dangerous Budget Fantasy

"The most obstinate illusions are ultimately broken by facts."
—Trevor Roper, The Last Days of Hitler

Illusions in government budgeting can be dangerous, especially when used to calm public anxiety during tough times. Successive administrations—Jonathan, Buhari, and now Tinubu—have clung to overly optimistic assumptions, especially regarding oil production. This is the root of our deepening debt crisis.

The current $24.14 billion loan request may not even be the last for 2025. What makes it troubling is the lack of any credible revenue plan that could ensure its repayment without further borrowing.

For example, Nigeria has repeatedly overestimated its crude oil production capacity. Despite budget targets of 2 million barrels per day (mbpd), the actual output so far in 2025 has averaged just 1.5mbpd. This shortfall of 500,000 barrels per day amounts to roughly 14 million barrels missed monthly—translating to a revenue gap of about $1.125 billion per month or $5.625 billion over five months.

Worse still, even the barrels we do produce are being sold for about $10 less per barrel than the $75 budget benchmark, adding another $2.1 billion shortfall. These gaps help explain the urgency behind the $24.14 billion request.

Budgeting Without Global Context

"Global oil demand growth is projected to slow from 990kb/d in Q1 2025 to 650kb/d for the rest of the year."
—Google Report

The government’s recurring error is its failure to consider global oil market realities. This is not new. Under President Jonathan, then Finance Minister Ngozi Okonjo-Iweala presented the 2013–2015 Medium-Term Expenditure Framework (MTEF) based on a production estimate of 2mbpd—even though OPEC’s quota for Nigeria was just 1.7mbpd. That projection, like many since, ignored global efforts to reduce oil supply to avoid a price crash.

Fast forward to today: despite producing less than the OPEC quota and selling at lower prices, the government continues to base budgets on unrealistic projections. Okonjo-Iweala’s decisions then were flawed, and the pattern continues with Tinubu.

President Buhari inherited a broken budget model and worsened it—delaying cabinet appointments, appointing an accountant as finance minister, and embracing the 2mbpd myth in all eight budgets under his administration. Tinubu, in turn, received a faulty 2023 budget and has continued the trend with similarly unrealistic 2024 and 2025 budgets.

The End of the Oil Era

"Everything comes to an end," my parents used to say. That wisdom holds especially true for the fossil fuel industry.

Global giants like China, the U.S., Europe, and India—who together account for nearly 75% of global fuel consumption—are rapidly transitioning to cleaner energy. Even Saudi Arabia is investing in hydrogen fuel. Fewer new petrol-powered cars are being made. Who, then, will buy 2mbpd of Nigerian crude, assuming we could even produce that much?

It’s time for a serious reckoning. President Tinubu must urgently recruit economists and financial planners who understand global trends and can draft realistic, fact-based budgets. Nigeria cannot afford more illusions—or more loans based on them.