Experts Raise Questions Over Debt, Accountability

President Bola Tinubu’s proposed $21.7 billion exterior borrowing plan has renewed issues over Nigeria’s debt sustainability, accountability for earlier loans and the financial advantages Nigerians stand to realize from further borrowing.

The proposed borrowing includes $20.52 billion and €1.045 billion and is meant to finance tasks beneath the Federal Government’s 2026–2027 Supplementary External Borrowing Plan.

The amenities are anticipated to help investments in important sectors, together with energy, transportation, healthcare, schooling, agriculture, water provide, safety and employment technology.

However, the proposal has raised questions on Nigeria’s capacity to service further debt amid rising public liabilities, stress on authorities income and competing calls for for public expenditure.

A report revealed on October 28, 2026, put Nigeria’s public debt at N166.79 trillion on the finish of June 2026, in contrast with N87.37 trillion in June 2023.

The report additionally projected that the proposed borrowing might push the nation’s debt in the direction of N200 trillion if absolutely accredited and disbursed, relying on change charges and different debt actions.

The growth has intensified requires the federal government to exhibit that earlier loans have delivered measurable financial advantages earlier than taking up further obligations.

Economists Question Growing Borrowing

A report quoted Ibrahim Bakare, a professor of economics at Lagos State University, as expressing concern in regards to the authorities’s rising reliance on borrowing to finance an increasing price range.

Bakare stated, “The budget expanded to N68.3 trillion, and the revenue expected to fund most of that would come from borrowings, implying that the debt levels will rise. And that’s what we’re seeing now.”

His remarks spotlight issues in regards to the relationship between authorities expenditure, income technology and debt accumulation.

For Nigeria, the central query is whether or not financial development and authorities income can increase sufficiently to satisfy future compensation obligations with out crowding out important public companies.

‘What You Do With Borrowed Funds Is Critical’

Eze Onyekpere, lead director of the Centre for Social Justice, stated the important thing situation was how borrowed cash was spent.

“We do not have much problem with collecting loans, but what you actually do with borrowed funds, and so that is the critical challenge of Nigeria,” he stated.

Onyekpere argued that borrowing needs to be directed in the direction of capital expenditure, tasks able to producing financial returns and human capital growth.

His place underscores the necessity for the Federal Government to publish detailed data on tasks financed via earlier loans, together with their prices, implementation standing and financial affect.

Such disclosures would assist Nigerians decide whether or not borrowing has improved infrastructure, expanded productive capability, generated employment and strengthened authorities income.

Sinking Fund Raises Repayment Concerns

Another report revealed on October 28, 2026, raised issues in regards to the Federal Government’s provisions for repaying maturing loans.

The report acknowledged that the federal government remitted N374.63 billion of the N1.32 trillion budgeted for the Sinking Fund to Retire Maturing Loans between 2021 and 2025.

The sinking fund is designed to assist the federal government put aside assets to satisfy maturing debt obligations.

The reported shortfall has raised questions in regards to the authorities’s preparedness to satisfy future repayments with out relying excessively on refinancing or further borrowing.

Although refinancing may help governments handle compensation schedules, extreme dependence on new debt to settle present obligations might enhance financing prices and expose public funds to additional dangers.

Nigeria’s exterior debt additionally creates international change publicity as a result of repayments should be made in foreign exchange, even when authorities revenues and the proceeds of some tasks are denominated in naira.

A sustained depreciation of the naira might due to this fact enhance the home forex value of servicing exterior loans.

Experts Propose Alternative Financing

Beyond issues about debt accumulation, economists have referred to as for larger consideration of different financing preparations for infrastructure and growth tasks.

Sylvester Anaba, head of analysis at United Capital, stated commercially viable tasks needs to be structured to draw non-public buyers with out exposing taxpayers to extreme dangers.

Ayo Teriba, chief government officer of Economics Associates, additionally advocated fairness financing as an alternative choice to typical borrowing.

Equity financing permits buyers to contribute capital in change for possession or a share of returns slightly than requiring the federal government to make mounted curiosity funds in the identical method as typical debt.

Other choices embody public-private partnerships, concessions, diaspora funding and the mobilisation of pension funds for appropriate infrastructure tasks.

However, such preparations require clear procurement, credible venture assessments and clear agreements on the distribution of dangers and returns.

Calls For Greater Accountability

The proposed borrowing has additionally intensified requires transparency earlier than the National Assembly approves the amenities.

A report stated former Vice-President Atiku Abubakar referred to as on lawmakers to droop consideration of the request till the federal government offered particulars of the tasks, prices, contractors, mortgage phrases and compensation obligations.

The Senate referred the proposal to its Committee on Local and Foreign Debts for scrutiny.

The debate has positioned renewed consideration on the function of the National Assembly, the Debt Management Office, the Auditor-General and different oversight establishments in monitoring public borrowing.

Public finance specialists argue that Nigerians ought to be capable of set up how a lot has been borrowed, how a lot has been disbursed, which tasks have been accomplished and what advantages have resulted from the expenditure.

An impartial evaluation of earlier borrowing might additionally assist decide whether or not further loans are justified and whether or not present venture implementation preparations are delivering worth for cash.

What Nigerians Stand To Gain

The financial justification for the proposed borrowing will finally rely upon its affect on residents.

Investments in electrical energy infrastructure might cut back working prices for companies, whereas improved roads and transport techniques might decrease the price of shifting items and connecting farmers to markets.

Funding for agriculture might enhance meals manufacturing, whereas investments in healthcare and schooling might strengthen human capital and help long-term productiveness.

However, these advantages aren’t assured. Poor venture choice, value overruns, corruption, implementation delays and insufficient upkeep might forestall the investments from producing enough financial returns.

The authorities should due to this fact exhibit how every proposed mortgage will contribute to financial development, job creation, elevated productiveness and income technology.

Economists and public finance specialists are anticipated to evaluate whether or not the proposed borrowing is sustainable, how earlier loans have been utilised and what safeguards are mandatory to make sure that the brand new amenities ship measurable advantages.

Ultimately, the controversy just isn’t merely about whether or not Nigeria ought to borrow, however whether or not the nation can exhibit that the cash borrowed is getting used successfully and that the ensuing financial positive aspects justify the compensation burden.