Nigeria’s latest borrowing proposal has brought an important question back into the national conversation: how much more debt can the country accumulate, and what concrete benefits should citizens expect in return?
With President Bola Tinubu seeking legislative approval for fresh external loans running into billions of dollars, attention is increasingly shifting from the amount being borrowed to the government’s ability to demonstrate that the money will translate into measurable improvements in people’s lives.
The controversy has gained fresh momentum following former President Olusegun Obasanjo’s criticism of the administration’s borrowing policy, warning that excessive public debt could leave generations yet unborn struggling with obligations they did not create.
Speaking on Friday at the third Ajibosin Annual Symposium in Abeokuta, Ogun State, Obasanjo challenged Tinubu’s earlier assertion that borrowing was not inherently harmful if the government could work hard to repay its obligations.
The former president described the comparison as unacceptable, arguing that the consequences of excessive borrowing could extend far beyond the present generation.
“Debt is worse than leprosy. Because leprosy destroys only one person. Debt destroys generations,” Obasanjo declared.
His remarks have reignited public debate over Nigeria’s economic direction, particularly at a time when millions of households and businesses are still grappling with high living costs, rising operating expenses and pressure on disposable incomes.
The bigger question behind the borrowing plan
Beyond the exchange between two former and current occupants of Nigeria’s highest political office, the more consequential issue is whether the proposed loans will deliver sufficient economic returns to justify their long-term financial implications.
Tinubu recently requested National Assembly approval for a supplementary external borrowing plan involving $20.52 billion and €1.045 billion for the 2026–2027 fiscal period.
According to the President, the proposed financing will support projects and programmes covering transportation, electricity, healthcare, education, agriculture, water supply, security, employment generation and financial management reforms.
Government officials have consistently maintained that borrowing remains a legitimate financing instrument when directed towards productive investments capable of stimulating economic activities and generating sufficient returns.
In an essay titled From Reforms to Delivery: Our Infrastructure Investment and Growth Strategy, Tinubu argued that the important consideration should not simply be how much the country borrows, but what it builds and the value created for future generations.
He specifically highlighted major infrastructure initiatives, including the Lagos-Calabar Coastal Highway, Sokoto-Badagry Superhighway, electricity grid improvements and upgrades to major commercial ports.
The President also projected that the Lagos-Calabar Coastal Highway could reduce transportation costs along its route by between 15 and 20 per cent, while generating substantial employment opportunities.
However, the central challenge is ensuring that these projected benefits become verifiable outcomes rather than remain attractive figures in official presentations.
When repayment competes with development
Nigeria’s borrowing debate is particularly significant because public debt obligations do not exist independently of the country’s revenue position.
Every loan obtained by the government creates repayment responsibilities, including interest payments, which must eventually be met from public resources.
According to figures reported by BusinessDay, Nigeria’s public debt increased from N87.38 trillion in June 2023 to N166.79 trillion in June 2026. Exchange-rate movements have also contributed to changes in the naira value of external obligations.
Although the debt-to-GDP ratio is not the only measure of a country’s ability to manage its obligations, the size of government revenue available for servicing debt remains an important consideration.
A government that commits a substantial proportion of its earnings to meeting existing obligations inevitably faces difficult choices when allocating resources to education, healthcare, security, infrastructure and social protection.
For ordinary Nigerians, the implications are not necessarily measured in debt statistics but in the quality of public services, availability of opportunities and the government’s capacity to respond to pressing national needs.
This is why the latest borrowing proposal deserves scrutiny beyond political disagreements.
The accountability test Nigerians should demand
One important aspect of the current debate is the need for a transparent connection between every major borrowing commitment and the projects it is expected to finance.
Nigerians should be able to establish which projects are receiving the funds, how much has been allocated to each, when implementation will begin and what measurable targets contractors and supervising agencies are expected to achieve.
Regular public disclosure of disbursements, project completion rates, procurement arrangements and independent audit findings would also strengthen confidence in the borrowing process.
The National Assembly equally has an important responsibility beyond granting approvals. Its oversight should extend to monitoring how the loans are utilised and determining whether the promised development objectives are being achieved.
Without such accountability, even projects presented as investments in the country’s future could become expensive financial commitments with limited benefits for the people expected to repay them.
A lesson from Nigeria’s previous debt experience
Obasanjo’s intervention also carries historical significance because his administration secured the landmark $30 billion Paris Club debt relief in 2005, following negotiations that substantially reduced Nigeria’s external debt obligations.
That experience remains an important reference point in the country’s economic history, particularly because debt relief was expected to create additional fiscal space for development spending.
However, Nigeria’s subsequent return to substantial borrowing demonstrates that debt reduction alone cannot guarantee lasting economic stability without stronger revenue generation, productive investment and responsible public financial management.
Obasanjo also questioned the country’s dependence on economic prescriptions from international financial institutions, particularly the World Bank and International Monetary Fund, arguing that Nigeria must develop solutions that reflect its peculiar economic circumstances.
His comments were delivered at a symposium examining the application of artificial intelligence to grassroots development, where he also warned that African countries could become vulnerable to exploitation if they failed to control their data, technological infrastructure and intellectual property.
Beyond political arguments
While the disagreement between Obasanjo and Tinubu may continue to generate political reactions, the real significance of the debate lies in the financial future of the country.
The President’s argument that borrowing can support development is not without economic merit. Countries across the world borrow to finance infrastructure and other investments that may take years to generate returns.
Nevertheless, responsible borrowing requires more than identifying projects and securing legislative approval. It demands credible feasibility assessments, prudent financing arrangements, effective implementation and public accountability.
For Nigeria, the challenge is to ensure that another round of external financing does not become an additional burden without corresponding improvements in productivity, infrastructure and citizens’ welfare.
Ultimately, the success of the proposed borrowing plan will not be determined by the size of the loans secured or the political arguments surrounding them.
It will be judged by the roads that are completed, the electricity delivered, the hospitals improved, the businesses supported and the jobs created.
More importantly, Nigerians must be able to see where the money went, what it achieved and who is responsible when promised results fail to materialise.
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