Former Labour Party presidential candidate, Peter Obi, has criticized the administration of President Bola Ahmed Tinubu over what he described as rising national debt and poor fiscal prioritisation in Nigeria.
Obi warned that the country is being pushed toward what he termed “economic slavery” through excessive borrowing, cautioning that continued reliance on debt could lead to long-term economic stagnation.
In a statement shared on his X handle on Monday titled “Debt Servicing, Borrowing, and Nigeria’s Fiscal Priorities,” Obi reacted to President Tinubu’s recent disclosure that Nigeria is projected to spend about $11.6 billion on debt servicing.
He argued that the amount set aside for debt repayment is significantly higher than combined allocations to key sectors such as healthcare, education, and poverty reduction.
President Tinubu, speaking at the Africa Forward Summit in Nairobi, Kenya, had earlier raised concerns about the pressure of debt servicing on Nigeria’s economy, noting that a large portion of national revenue is being used to repay loans instead of funding productive sectors that drive growth, create jobs, and support industrialisation.
According to data from the Debt Management Office (DMO), Nigeria paid about $848.7 million in 2025 to two World Bank arms—the International Development Association and the International Bank for Reconstruction and Development—while its total debt to the institutions rose to about $19.8 billion by the end of the year.
The figures show that despite significant repayments, Nigeria’s external debt burden continues to grow, increasing fiscal pressure on government finances.
Obi stated that borrowing is not necessarily bad when properly managed and directed toward productive sectors such as education, healthcare, infrastructure, and innovation, citing countries like Japan, the United States, and Singapore as examples of economies that use debt effectively for development.
However, he argued that Nigeria’s case is different, claiming that borrowed funds have largely been spent on consumption with little visible developmental impact.
He also alleged that a significant portion of Nigeria’s current debt stock was accumulated under the present administration, noting that external borrowing has continued to rise through new loan arrangements from foreign financial institutions.
Obi further compared Nigeria’s projected debt servicing obligations with budgetary allocations to key sectors in the 2026 fiscal plan, describing the disparity as deeply concerning.
He noted that spending on health, education, and social protection combined is far lower than the country’s debt repayment commitments, warning that this imbalance could undermine human capital development and poverty alleviation efforts.
According to him, even the limited funds allocated to these sectors may not be fully implemented or properly utilised.
Obi maintained that the real issue is not borrowing itself but whether such loans are translated into measurable economic growth, productivity, and improved living standards.
He cautioned that if this trend continues, debt servicing could evolve from a routine financial obligation into a structural burden that weakens Nigeria’s economic future.