Former Anambra State Governor Peter Obi has raised alarm over Nigeria’s plan to spend about $11.6 billion on debt servicing in 2026, describing it as a troubling fiscal imbalance.
Obi made the remarks in a statement on his official X account on Monday, noting that while borrowing is not inherently wrong, Nigeria’s debt profile reflects poor prioritisation.
Obi explained: “A huge proportion of past borrowing has been directed toward consumption, with limited visible or sustainable developmental outcomes to justify the scale of indebtedness.”
He added: “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.”
According to him, recent external loans include $5 billion from First Abu Dhabi Bank, $1 billion from UK Export Finance via Citibank London, $1.25 billion under consideration from the World Bank, and $516 million arranged through Deutsche Bank.
By comparison, Obi highlighted that Nigeria’s 2026 budget allocates ₦2.46 trillion to health, ₦2.56 trillion to education, and ₦865 billion to poverty alleviation — a combined ₦5.885 trillion. Debt servicing at ₦17–₦18 trillion is nearly three times higher.
Call For Productive Borrowing
Obi warned: “This imbalance highlights a troubling fiscal reality in which debt obligations increasingly crowd out investment in human capital and poverty reduction.”
He cited countries such as Japan, the UK, the US, UAE, Singapore, and Indonesia, where borrowings are channelled into education, healthcare, infrastructure, and innovation, generating long-term returns.
“Despite high debt levels, their obligations remain more manageable because they are tied to measurable productivity,” he said.
Obi concluded that Nigeria’s challenge is not borrowing itself but the failure to convert loans into inclusive growth and improved living standards. “Without this, debt servicing shifts from being a temporary fiscal obligation to a long-term structural burden,” he noted.
His comments came days after President Bola Tinubu disclosed at the Africa Forward Summit in Nairobi that Nigeria is projected to spend $11.6 billion on debt servicing in 2026.
Do you agree with Obi’s characterization of Tinubu’s fiscal regime, which seems to rival and surpass the notorious borrowing and spending spree under the previous administration of ex-president Muhammadu Buhari?
Rate, Like 👍, Comment 💬, Share this article, Follow us on our social media handles, and Submit your own story to get featured and earn rewards!
WhatsApp Channel
Telegram Channel
