Inside Nigeria ‘s Debt Profile Ruckus

In recent times, the Tinubu’s administration has come under scathing attack from opposition leaders like Peter Obi, Atiku Abubakar, some section of the media, some economic analysts and critics regarding President Bola Ahmed Tinubu’s borrowing and Nigeria’s rising public debt.

Speaking at a political event, Obi warned that Nigeria’s debt trajectory was unsustainable.

He argued that the government’s borrowing had continued to rise without corresponding improvements in infrastructure, healthcare, education or productive investment. 

He asserted that Tinubu borrowed over N100 trillion in three years.

Obi accused the Tinubu administration of “remarkably imprudent borrowing,” saying:

“President Bola Tinubu’s administration has engaged in remarkably imprudent borrowing, escalating Nigeria’s total debt to approximately N200 trillion. This represents an increase of over N100 trillion within a mere three years…”

He contrasted this with the debt accumulated under former President Muhammadu Buhari and demanded an explanation of how the borrowed funds had been utilised. 

Obi questioned why borrowing continued despite government claims of improved revenue.

“Shockingly, while Nigerians expected a reduction in borrowing with the exponential increase in revenue, the opposite is the case.”

He demanded transparency and accountability over the use of the loans. 

Similarly, Atiku Abubakar has over times attacked Tinubu over his borrowing.

He warned that the additional loans would dangerously increase Nigeria’s debt burden and mortgage the country’s future. 

Atiku argued that fresh borrowing was unjustifiable because:

 “Nigeria’s debt burden is already at alarming levels.”

He noted that public debt had risen sharply since Tinubu assumed office and urged the government to pursue fiscal discipline instead of accumulating more debt. 

In one of his strongest attacks, Atiku described the administration’s borrowing policy as:”Debt addiction is economic vandalism.”

He further described the rising debt profile as: “Reckless, unsustainable and dangerous to Nigeria’s economic future.”

Atiku argued that excessive borrowing without commensurate economic returns would worsen the country’s fiscal outlook and place an unfair burden on future generations. 

These statements formed part of sustained criticism by both opposition leaders, who argued that the Tinubu administration’s borrowing was excessive and lacked sufficient transparency and economic justification. 

Several media commentators have also reported that the Tinubu’s administration has incurred more debts than normal.

However, the investigation conducted over a period of 3 months has uncovered as untrue that the entire N109.43 trillion added to Nigeria’s public debt between 2023 and 2025 was incurred by Tinubu’s admiistration arguing that more than half of the increase resulted from inherited liabilities and the sharp depreciation of the naira rather than fresh loans.

The research, titled “A Comparative Analysis of Public Debt Inherited and Public Debt Incurred by the Tinubu Administration in Nigeria, 2019 to 2025,” concluded that only N45.12 trillion—about 41.2 per cent of the total increase in public debt—represented genuine new borrowing by the Tinubu administration.

According to the research, approximately N64.30 trillion, representing 58.8 per cent of the increase, arose from what it described as an “inheritance effect” comprising N41.60 trillion from the revaluation of inherited foreign debt following the June 2023 naira float and N22.70 trillion from the securitisation of inherited Central Bank Ways and Means advances.

The findings directly challenge claims that the Tinubu administration borrowed the full amount reflected in the country’s debt stock, insisting that headline naira figures have created a misleading public perception.

“Of the N109.43 trillion increase recorded between the first quarter of 2023 and the fourth quarter of 2025, approximately N45.12 trillion, or 41.2 per cent, reflects genuine new borrowing, while approximately N64.30 trillion, or 58.8 per cent, reflects an inheritance effect,” the investigation noted.

It further noted that Nigeria’s total public debt rose from N49.85 trillion in the first quarter of 2023, just before Tinubu assumed office, to N159.28 trillion by the end of 2025.

However, it argued that the dramatic increase was largely an accounting consequence of two major policy developments shortly after Tinubu took office—the floating of the naira, which significantly increased the naira value of existing foreign debts, and the formal recognition of N22.7 trillion in Ways and Means advances accumulated by the previous administration.

The study said measuring Nigeria’s debt in United States dollars presents a strikingly different picture.

 “Measured in United States dollars, the same period records an increase of only $2.67 billion, or 2.5 per cent,” the report said.

It described the contrast between the 219.5 per cent rise in naira-denominated debt and the 2.5 per cent increase in dollar terms as evidence that exchange-rate movements—not borrowing alone—drove much of the increase.

The researchers argued that attributing the entire rise in public debt to Tinubu’s borrowing decisions amounts to a distortion of fiscal reality.

 “The headline naira comparison substantially overstates the borrowing attributable to the administration,” the report added.

The study further explained that Nigeria’s inherited external debt became significantly more expensive in naira terms after the exchange rate reforms, even though the actual dollar-denominated obligations changed only marginally.

It also maintained that the N22.7 trillion Ways and Means advances should be treated as inherited debt because the liabilities were accumulated before the May 2023 handover and merely entered the official debt books after being securitised.

“Counting it as borrowing by the administration would be a category error,” the researchers argued.

The report urged policymakers, analysts and the media to present public debt figures in both naira and dollar terms and to separate genuine borrowing from exchange-rate revaluation and accounting adjustments.

It also recommended that future debt sustainability assessments should distinguish inherited liabilities from new borrowing to provide what it described as a more accurate basis for evaluating the fiscal performance of successive administrations.

The study concluded that while Nigeria’s debt burden remains significant, public debate should focus on the composition and drivers of debt growth rather than headline figures alone, warning that nominal naira comparisons can exaggerate the level of borrowing in economies experiencing sharp currency depreciation.

Corroborating TheMatrix Newspaper’s findings, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, insisted that Nigeria has not over-borrowed and that much of the increase in the debt stock was driven by the devaluation of the naira and the formal recognition of inherited liabilities rather than excessive new borrowing.

Speaking during his defence of the Federal Government’s fiscal position before the Senate, Oyedele argued that public debt should not be assessed solely by its nominal size but by the country’s capacity to sustain it, generate revenue and deploy borrowed funds to productive investments.

According to him, the sharp depreciation of the naira following the foreign exchange reforms significantly increased the naira value of Nigeria’s external debt, even though the dollar value of the country’s obligations did not rise proportionately.

He explained that because a substantial portion of Nigeria’s debt is denominated in foreign currencies, the devaluation of the naira automatically inflated the debt stock when converted into local currency.

“The increase in the debt stock was largely an accounting effect arising from the exchange-rate adjustment, not simply because the government borrowed excessively,” Oyedele said.

The minister also disclosed that a sizeable portion of the increase resulted from the formal recognition of inherited liabilities, including Ways and Means advances, which had previously not been fully reflected in the country’s official debt figures.

According to him, the Federal Government did not borrow an additional ₦80 trillion as widely claimed, explaining that about ₦33 trillion was added to the debt stock following the recognition of existing liabilities, while the government has utilised less than half of the external borrowing approved by the National Assembly.

Oyedele maintained that Nigeria’s debt-to-GDP ratio remains at about 40 per cent, which he described as relatively low compared with several emerging and advanced economies.

He noted that South Africa’s debt-to-GDP ratio stands at about 85 per cent, Egypt’s at 80 per cent, Ghana’s at 60 per cent, Kenya’s at 75 per cent, while the United States and the United Kingdom record debt ratios of about 130 per cent and 110 per cent respectively.

The minister also pointed to improvements in Nigeria’s debt servicing profile, saying the country’s debt service-to-revenue ratio has declined from nearly 100 per cent in December 2022 to below 60 per cent, reflecting stronger revenue mobilisation and improved fiscal management.

Oyedele argued that while debt servicing had historically placed pressure on public finances, ongoing fiscal and tax reforms are gradually easing those pressures.

He further observed that Nigeria’s revenue-to-GDP ratio remains among the lowest globally, making borrowing necessary to finance infrastructure and other critical development projects while reforms continue to strengthen domestic revenue generation.

According to him, the government’s fiscal reform programme is designed to broaden the tax base, reduce revenue leakages and improve public financial management, thereby enhancing the country’s fiscal sustainability.

Dismissing claims that Nigeria is over-borrowed, Oyedele insisted that the real issue is whether borrowed funds are invested in projects that expand productive capacity, create jobs and generate future revenues rather than the headline size of the debt.

He maintained that with a debt-to-GDP ratio of about 40 per cent, an improving debt service-to-revenue ratio, and much of the increase in the debt stock attributable to currency devaluation and the recognition of inherited liabilities, Nigeria’s debt remains within sustainable limits.

Similarly, Chief Economist at SPM Professionals, Paul Alaje, defended Nigeria’s rising public debt, arguing that the country’s debt burden cannot be attributed solely to fresh borrowing, but was significantly inflated by the sharp depreciation of the naira following foreign exchange reforms.

Speaking during an interview on ARISE News, Alaje backed the position of Oyedele, that the Tinubu administration did not contract up to ₦80 trillion in fresh loans.

According to him, while the Federal Government had borrowed, the dramatic increase in the country’s debt stock was largely the result of exchange-rate adjustments, which automatically increased the naira value of Nigeria’s foreign debt.

“If you are looking at going to the market fresh to ask for new money, the Federal Government borrowed, but it may not be up to ₦80 trillion. Here is the real fact: we borrow money over the years, and when we borrow in our currency, exchange rate becomes a major factor,” Alaje said.

He explained that Nigeria’s external debt is revalued using the prevailing exchange rate, meaning that every major depreciation of the naira inflates the local currency value of existing obligations even without equivalent new borrowing.

“Did Nigeria borrow up to that amount? Yes, because we are also adjusting our exchange rates. But if you are speaking nominally, if you are speaking accounting, I will tell you no, we did not borrow up to the money.

 At the end of the day, it’s not about Nigeria accounting; it’s about Nigeria economics,” he said.

Alaje, however, warned that Nigeria’s debt challenge extends beyond the debate over fresh borrowing, saying successive governments have increasingly relied on short-term borrowing and debt refinancing instead of pursuing sustainable long-term economic solutions.

“The real conversation for me is using debt to refinance. We have been doing short-term solutions. We fix the problem today, raise new money in the market and find another quick fix. But the long-term real solution is that the naira has always been susceptible to devaluation,” he stated.

While insisting that debt itself is not necessarily a problem, the economist cautioned that it becomes a major concern when a country borrows at high interest rates without generating sufficient returns.

“Debt is not a problem. But I dare tell you that debt is a major concern, especially for a nation that pays high interest rates on debt,” he said.

On the utilisation of borrowed funds, Alaje acknowledged that part of Nigeria’s debt had financed critical infrastructure projects, while other borrowings were used for debt refinancing, recurrent expenditure and inherited liabilities, including the old Ways and Means advances.

He explained that governments often resort to refinancing because projected revenues frequently fall short of expectations.

“Government projected that it would have some revenue, but between the time the budget is passed and when revenue comes, there is a lag. So government goes to the market to raise treasury bills and bonds, hoping that when revenue comes it will repay the money,” he explained.

The economist questioned Nigeria’s long-standing inability to meet its revenue projections, warning that repeated reliance on supplementary budgets was unsustainable.

“Can we say that we have ever met our revenue targets over the last 10 or 15 years? The answer is no. More often than not, we return with supplementary budgets. That is a recipe for disaster,” he said.

He also linked persistent revenue shortfalls to poor budget implementation, particularly capital expenditure, noting that contractors often execute projects only to receive a fraction of the expected funding.

According to him, greater transparency in public finances would help address concerns over government revenue and expenditure.

“If senators are asking questions about where the revenue is going, it is important to provide answers for Nigerians so people will not be thinking otherwise,” Alaje said.

Commenting on monetary policy, the economist backed the decision of the Central Bank of Nigeria to retain the Monetary Policy Rate at 26.5 per cent, saying lowering interest rates prematurely could weaken foreign reserves, put pressure on the exchange rate and fuel inflation.

“If we reduce our interest rate, it will affect our reserves. If it affects our reserves, it will affect the exchange rate. If it affects the exchange rate, it will affect prices, and if it affects prices, it will affect inflation,” he said.

Nevertheless, he admitted that elevated borrowing costs were weighing heavily on businesses and the productive sector.

“The real sector is already stifled. That is why reforms should not be limited to one sector. They should cover the entire economy,” he added.

Alaje stressed that Nigeria’s long-term economic recovery would depend not only on fiscal and monetary reforms but also on increased productivity, improved infrastructure, enhanced security and coordinated economic policies.

“The real thing that is missing in all of this is productivity. In spite of all the reforms, in spite of the money and the foreign reserves, if there is no productivity, the economy cannot achieve sustainable growth,” he said.

While endorsing the Monetary Policy Committee’s decision to hold interest rates steady, Alaje maintained that monetary policy alone could not solve Nigeria’s economic challenges.

“I do not disagree with what the Monetary Policy Committee did. It was better to retain rates. But we also need to combat insecurity, prioritise transport and energy, and place greater emphasis on productivity,” he said.