Dare Babalola
Former Labour Party presidential candidate, Peter Obi, has raised concerns over Nigeria’s rising debt servicing obligations, warning that the country’s fiscal priorities are becoming increasingly unsustainable.
In a statement issued on Monday, Obi reacted to remarks by President Bola Tinubu during a recent foreign tour that Nigeria would spend about $11.6 billion on debt servicing.
According to Obi, the figure should worry Nigerians concerned about the country’s economic future and long-term development.
The former Anambra State governor said borrowing is not inherently wrong if it is driven by prudence and invested in productive sectors capable of generating sustainable economic returns.
He cited countries such as Japan, the United Kingdom, the United States, the United Arab Emirates, Singapore and Indonesia as examples of nations with high debt profiles that nonetheless channel borrowed funds into critical sectors including education, healthcare, infrastructure and innovation.
Obi, however, argued that Nigeria’s experience has been different, alleging that a significant portion of the country’s borrowing has been spent on consumption with little visible developmental impact.
“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,” he said.
He listed recent external borrowing arrangements to include about $5 billion from First Abu Dhabi Bank in the UAE, $1 billion from UK Export Finance through Citibank London, a proposed $1.25 billion World Bank facility and an additional $516 million arranged through Deutsche Bank.
According to him, the latest external loan commitments total roughly $7.8 billion, excluding continued domestic borrowing through monthly bond issuances.
Obi further expressed concern over what he described as an imbalance in the 2026 budget, noting that allocations to health, education and poverty alleviation combined stood at about ₦5.885 trillion, while debt servicing was projected at between ₦17 trillion and ₦18 trillion.
He argued that the development reflects a troubling fiscal reality where debt obligations are crowding out investment in human capital and poverty reduction.
The former governor also alleged that even the limited allocations to critical sectors may not be fully released or effectively utilised.
“Ultimately, the central issue is not borrowing itself, but whether borrowed funds are being converted into measurable productivity, inclusive growth, and improved living standards,” Obi stated.
He warned that without productive use of borrowed funds, debt servicing could become a long-term structural burden that would constrain development and worsen economic vulnerability.
