NDC chieftain and Presidential hopeful, Peter Obi has expressed concern over President Tinubu’s recent disclosure that Nigeria will spend about #11.6bn on debt servicing this year.
Obi made the remarks while reacting to comments attributed to President Bola Ahmed Tinubu during a recent foreign tour, where the President reportedly stated that Nigeria would spend about $11.6 billion on debt servicing. He said the figure reflects a troubling fiscal reality that demands urgent national attention.
According to him, borrowing is not inherently bad if it is channelled into productive investments capable of generating long-term economic returns. He cited several countries, including Japan, the United Kingdom, the United States, the United Arab Emirates, Singapore, and Indonesia, as examples of economies that manage high debt levels by investing in infrastructure, education, healthcare, and innovation.
He argued that Nigeria’s borrowing history differs significantly, claiming that a large portion of past loans has been directed toward consumption rather than productive development outcomes.
Obi further noted that Nigeria’s debt stock has continued to rise under the current administration. He listed recent external borrowing commitments, including about $6 billion in total external loans (comprising $5 billion from First Abu Dhabi Bank in the UAE and $1 billion via UK Export Finance through Citibank London), alongside a proposed $1.25 billion World Bank facility and an additional $516 million arranged through Deutsche Bank, bringing recent external borrowing commitments to approximately $7.8 billion. He also pointed to continued domestic borrowing through regular bond issuances.
He also highlighted budgetary figures showing that debt servicing, estimated at about ₦17–₦18 trillion depending on exchange rates, is nearly three times the combined allocations to health (₦2.46 trillion), education (₦2.56 trillion), and poverty alleviation (₦865 billion).
He described the imbalance as a major fiscal concern, warning that debt obligations are increasingly crowding out investments in human capital development. He also expressed concern that even approved funds for key sectors may not be fully released or effectively utilised.
Obi stressed that the key issue is not borrowing itself, but whether borrowed funds are converted into productivity, inclusive growth, and improved living standards.
He concluded that without such outcomes, debt servicing risks becoming a long-term structural burden on the economy.
Obi’s full statement is published below…
Debt Servicing, Borrowing, and Nigeria’s Fiscal Priorities
During his recent foreign tour, President Bola Ahmed Tinubu stated that Nigeria will spend about $11.6 billion on debt servicing, a figure that should concern anyone interested in the country’s economic future and long-term development.
There is nothing inherently wrong with borrowing when it is guided by prudence and directed toward productive investment. Countries such as Japan, the United Kingdom, the United States, the United Arab Emirates, Singapore, and Indonesia are all heavily indebted, yet their borrowings are largely channelled into education, healthcare, infrastructure, and innovation – sectors that generate long-term economic returns and sustain repayment capacity. As a result, despite high debt levels, their obligations remain more manageable because they are tied to measurable productivity.
Nigeria’s situation, however, is markedly different. A huge proportion of past borrowing has been directed toward consumption, with limited visible or sustainable developmental outcomes to justify the scale of indebtedness.
It is also important to note that a huge portion of the debt currently being serviced was accumulated under the Tinubu administration itself, while borrowing has continued at a significant pace. The administration’s recent external borrowing alone includes about $6 billion (from First Abu Dhabi Bank in the UAE—$5 billion, and UK Export Finance via Citibank London—$1 billion), a further $1.25 billion under consideration from the World Bank, and an additional $516 million arranged through Deutsche Bank, bringing the latest known external loan commitments to roughly $7.8 billion. In addition, domestic borrowing through monthly bond issuances continues to add to the overall debt stock.
Against this backdrop, Nigeria’s 2026 budget shows that health is ₦2.46 trillion, education is ₦2.56 trillion, and poverty alleviation is ₦865 billion, giving a combined total of about ₦5.885 trillion for these three critical sectors. By comparison, debt servicing at about $11.6 billion (approximately ₦17–₦18 trillion, depending on exchange rate assumptions) is almost three times higher than the total allocation to health, education, and social protection combined. This imbalance highlights a troubling fiscal reality in which debt obligations increasingly crowd out investment in human capital and poverty reduction. Moreover, even within the limited allocations to these sectors, funds may not be fully released, and a significant portion of what is eventually released could be misappropriated.
Ultimately, the central issue is not borrowing itself, but whether borrowed funds are being converted into measurable productivity, inclusive growth, and improved living standards. Without this, debt servicing shifts from being a temporary fiscal obligation to a long-term structural burden that constrains development and deepens economic vulnerability.
A New Nigeria is POssible. -PO
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