The National Assembly recently gave the green light for the Tinubu administration to secure a $2.2 billion external loan to address the fiscal deficit in Nigeria’s 2024 budget.
This move is part of a broader strategy to plug an estimated $9.17 billion deficit fueled by a combination of eurobonds, debt servicing costs on domestic and foreign obligations, and the controversial Ways and Means facility.
However, the speed of the approval and the broader implications of Nigeria’s growing debt burden have sparked heated debates among analysts and citizens.
Economic experts and social commentators have raised concerns about the implications of the approval.
Dr. Tunde Oladipo, an economist at Lagos Business School, argued, “The government’s persistent reliance on borrowing signals a lack of fiscal discipline. What’s concerning is that much of this borrowing is consumed in recurrent expenditure rather than being invested in productive capital projects that can stimulate growth.”
Similarly, financial analyst Bukola Adeyemi noted, “The rapid approval by the National Assembly suggests a troubling lack of due diligence. We need transparency in how these loans will be utilized. Nigerians are tired of seeing funds misallocated to luxury expenses like SUVs for lawmakers or unnecessary foreign trips while critical infrastructure remains in decay.”
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The timing of the borrowing has also drawn criticism. Many expected discussions to shift toward the 2025 budget by this point in November.
According to policy analyst Emeka Umeh, “This eleventh-hour borrowing undermines the budget cycle’s integrity and raises questions about the administration’s planning process. It suggests a government more focused on crisis management than strategic planning.”
The Debt Management Office (DMO), citing sections 21(1) and 27(1) of its Establishment Act of 2003, has justified the borrowing, claiming it aligns with Nigeria’s debt sustainability framework.
However, critics argue that these justifications often serve the interests of the administration in power rather than the long-term welfare of the country.
The public’s frustration reflects the daily challenges faced by Nigerians. With inflation nearing 40% and basic services such as healthcare, education, and transportation in disrepair, the disconnect between government actions and citizens’ realities is palpable.
A Lagos-based trader, who preferred to remain anonymous, lamented, “We can’t see the impact of all these loans. Roads are bad, air travel is unsafe, refineries are not working, and yet we keep borrowing. It’s like we are borrowing to survive rather than to thrive.”
The speed at which the National Assembly approved the borrowing has revived accusations that it functions as an extension of the Executive branch.
Political analyst Dr. Hadiza Musa observed, “When it comes to bills that benefit the political elite, the Assembly acts with unmatched speed. Compare this to reforms aimed at good governance, which can languish for years. This pattern undermines democratic accountability.”
As Nigeria’s debt-to-GDP ratio approaches critical levels, experts have called for a reevaluation of fiscal policies.
“We need a sustainable approach to public finance,” Dr. Oladipo emphasized. “This includes plugging revenue leakages, expanding the tax base, and investing in sectors that can generate returns.”