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 achieve from further borrowing.

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

The services are anticipated to help investments in important sectors, together with energy, transportation, healthcare, training, agriculture, water provide, safety and employment era.

However, the proposal has raised questions on Nigeria’s capability to service further debt amid rising public liabilities, strain 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 may push the nation’s debt in the direction of N200 trillion if totally authorized and disbursed, relying on trade charges and different debt actions.

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

Economists Question Growing Borrowing

A report quoted Ibrahim Bakare, a professor of economics at Lagos State University, as expressing concern concerning the authorities’s growing reliance on borrowing to finance an increasing finances.

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 concerning the relationship between authorities expenditure, income era and debt accumulation.

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

‘What You Do With Borrowed Funds Is Critical’

Eze Onyekpere, lead director of the Centre for Social Justice, stated the important thing concern 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 must 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 by means of earlier loans, together with their prices, implementation standing and financial influence.

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 concerning the Federal Government’s provisions for repaying maturing loans.

The report said 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 sources to satisfy maturing debt obligations.

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

Although refinancing may help governments handle reimbursement schedules, extreme dependence on new debt to settle current obligations may improve financing prices and expose public funds to additional dangers.

Nigeria’s exterior debt additionally creates international trade publicity as a result of repayments have to 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 may due to this fact improve the home foreign money price of servicing exterior loans.

Experts Propose Alternative Financing

Beyond issues about debt accumulation, economists have known 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 must 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 standard borrowing.

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

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

However, such preparations require clear procurement, credible challenge 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 services.

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

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

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

Public finance consultants argue that Nigerians ought to have the ability to 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 unbiased evaluation of earlier borrowing may additionally assist decide whether or not further loans are justified and whether or not current challenge implementation preparations are delivering worth for cash.

What Nigerians Stand To Gain

The financial justification for the proposed borrowing will in the end rely on its influence on residents.

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

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

However, these advantages usually are not assured. Poor challenge choice, price overruns, corruption, implementation delays and insufficient upkeep may stop the investments from producing ample financial returns.

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

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

Ultimately, the talk will not be merely about whether or not Nigeria ought to borrow, however whether or not the nation can show that the cash borrowed is getting used successfully and that the ensuing financial positive aspects justify the reimbursement burden.