By Prof Abiodun Ojo
In less than three years, the Federal Government of Nigeria under President Bola Ahmed Tinubu has embarked on one of the most aggressive borrowing sprees in the nation’s history. Between mid-2023 and late 2025, the government has secured trillions of naira and billi of dollars in loans purporting to fund capital projects — yet most of these projects have either not been completed or have seen very low budget performance relative to expectations.
Despite this record, the government is now pushing for yet another N17.89 trillion borrowing package to finance the 2026 budget, raising serious questions about fiscal discipline, project execution, and the onslong-term economic wellbeing of ordinary Nigerians.
A Pattern of Continued Borrowing Despite Poor Implementation
Since mid-2023, the Tinubu administration has borrowed hefty sums for capital budgets:
2023: The government borrowed N2.17 trillion to fund supplemental capital projects, yet only about 70 % of the targeted capital spending was implemented.
2024: Loans of $21.5 billion, €2.2 billion, and ¥15 billion were secured for capital projects — but just 30 % of the projects were met.
2025: Borrowing included $2.347 billion, $347 million, €4 billion, N1.15 trillion, and a $500 million sukuk bond — yet the capital implementation stood at 0 % as of December 11, 2025.
These figures paint a stark picture: the borrowed funds are not translating into visible progress on roads, bridges, power infrastructure, or other core public capital investments that Nigerians can see and benefit from. Meanwhile, living costs, inflation, and unemployment remain crushing burdens on the public.
Fiscal Realities: Rising Debt and Weak Revenues
Nigeria’s total public debt has been rising rapidly. As of the first quarter of 2025, the country’s debt stood at ≈₦149.39 trillion, with further increases reported by mid-2025 reaching ≈₦152.4 trillion.
Rather than slowing down, borrowing is poised to surge again. The 2026 budget framework calls for a 72 % jump in new loans — from N10.42 trillion in 2025 to N17.89 trillion in 2026.
Economists warn that continued heavy borrowing in the face of weak revenue performance and low capital implementation risks pushing Nigeria into a deeper debt trap, worsening inflation and crowding out private sector credit.
Why Continued Borrowing Without Results Is Dangerous
1. Debt Servicing Now Takes Priority Over Development
A growing share of government revenue is eaten up by debt servicing. In recent years, Nigeria spent as much or more on servicing debt than on capital investments, meaning less money actually goes into building infrastructure that could stimulate economic growth and improve lives.
2. Citizen Burden Rises Without Value Return
As debt grows, the economic burden on Nigerians increases. If Nigeria’s debt approaches ₦200 trillion, every citizen could owe upwards of ₦770,000. Meanwhile, ordinary Nigerians see little corresponding improvement in essential services, job creation, or general welfare.
3. Inefficiency and Mismanagement Undermine Public Trust
Both civil society actors and political critics alike have highlighted a disconnect between borrowing justifications and outcomes. For example, critics have accused the government of borrowing “against its own words” — securing more loans even after claiming improvements in revenue generation — without demonstrating that previous loans were effectively used.
Reports also suggest institutional weaknesses: billions in development finance funds remain unaccounted for, and many projects are abandoned or rolled over into future budgets.
A Call for Better Utilization — and a Moratorium on New Borrowing
Given these realities, Nigeria’s fiscal strategy needs an urgent overhaul. Here is what must be done:
📌 Prioritize Execution Before Additional Borrowing
The National Assembly and Federal Government should pause any new large-scale borrowing proposals until existing loans are transparently accounted for, and implementation performance improves significantly.
📌 Strengthen Transparency and Accountability
All loan inflows should be tracked with clear public reporting showing where funds are spent, what projects are underway, and measurable outcomes attained. Contracts must be published and independently audited.
📌 Enforce Fiscal Discipline and Strategic Planning
Borrowing must be tied to projects with real economic returns — such as energy generation, transportation corridors, and export-oriented infrastructure — not merely plugging budget deficits.
📌 Expand Revenue-Generating Reforms
Rather than deeper borrowing, Nigeria should focus on non-oil revenue expansion, tax reform, digitalisation of revenue collection, and boosting private sector growth — all of which reduce dependence on loans.
Conclusion
Nigeria’s persistent borrowing, without commensurate results in capital project execution, is placing an unsustainable burden on future generations. With citizens already struggling under a high cost of living and sluggish economic growth, it is irresponsible to continue accumulating debt without accountability and delivery of tangible public benefits.
Before the Federal Government seeks additional loans — including the massive N17.89 trillion proposed for 2026 — it must prove that current borrowings are translating into real infrastructure and economic improvement. Anything less risks leaving Nigeria poorer, more indebted, and with fewer resources to serve its people.
– Prof Abiodun Ojo
