Nigeria’s public debt has reached a staggering N142 trillion, a concerning new milestone in the country’s fiscal trajectory, with no immediate signs of relief from increasing borrowings by both the federal government and state governors. This marks a significant rise from previous debt levels, highlighting a growing trend in government borrowing as both the administration of President Bola Ahmed Tinubu and various state governments continue to seek loans to address fiscal challenges.
Experts have raised alarms over the rising debt burden, which has reached an alarming level, accounting for a substantial portion of the country’s GDP. The federal government’s borrowings have been primarily aimed at funding infrastructure projects, social programs, and addressing the budget deficit, but critics argue that the growing debt could create long-term fiscal strain and hinder economic growth.
State governments, in particular, have been borrowing heavily in recent years, with many governors seeking loans for various development initiatives. While these loans are intended to support state infrastructure, agriculture, education, and other sectors, there is concern over the sustainability of such borrowing, especially given the country’s low revenue generation capacity and volatile economic environment.
The debt rise comes at a time when Nigeria’s debt-to-GDP ratio has already exceeded international limits, and with no clear strategy to reduce borrowing in the short term, the country’s fiscal health remains under scrutiny by both local and international stakeholders.
The Tinubu administration, in power since May 2023, has defended its borrowing policies, arguing that loans are necessary for crucial investments in the nation’s economic infrastructure, which are expected to stimulate growth, create jobs, and improve living conditions. However, the long-term impact of this borrowing on Nigeria’s debt sustainability, credit rating, and overall economic stability remains uncertain.
Economic experts have urged the Nigerian government to implement comprehensive reforms to diversify revenue sources, enhance tax collection efficiency, and improve fiscal management to ensure the country’s growing debt burden does not undermine its economic prospects. They also emphasize the need for greater transparency and accountability in public sector borrowing.