Olu Allen
In 1999, when President Olusegun Obasanjo inherited a battered democracy and a debt-ridden economy, Nigeria was shackled by unsustainable foreign debt. But in one of the boldest acts of economic diplomacy in Africa’s history, his administration, led by Dr. Ngozi Okonjo-Iweala, negotiated what seemed impossible: debt relief.
By 2005/2006, Nigeria secured the cancellation of roughly $18 billion of its $30 billion Paris Club debt after paying $12 billion. It was controversial at home, but it was a strategic masterstroke that freed Nigeria from the chains of international debt servitude.
Almost overnight, Nigeria’s economic profile changed. By 2007, we had become Africa’s leading destination for Foreign Direct Investment (FDI).
The world respected us, not because we begged for aid, but because we proved we could manage our own house.
Fast forward to today. Two years into President Bola Ahmed Tinubu’s leadership, Nigeria seems to be crawling back into the very abyss Obasanjo pulled us from.
Yes, the Tinubu administration inherited profound economic challenges: an unsustainable fuel subsidy, a multiple exchange rate regime, and record budget deficits.
Removing these distortions was necessary, many experts agreed. But managing the aftermath has been poor, leaving Nigerians facing punishing inflation and a collapsing currency.
The recent TICAD9 conference in Tokyo symbolized this regression. African leaders, including Nigeria’s, were seen not as equal negotiating partners but as petitioners for a share of Japan’s $50 billion “aid” package.
How does a country that holds vast oil, gas, and human capital potential keep reducing itself to perpetual begging?
The debt numbers are alarming. According to the Debt Management Office (DMO), Nigeria’s external debt hit ₦70 trillion ($46 billion) in Q1 2025, a 26% rise year-on-year.
Overall public debt has soared to ₦149 trillion. Meanwhile, inflation is above 20%, eroding household incomes daily.
This is not how a serious country behaves.
Debt itself is not evil—it can be a tool for growth. But it becomes destructive when borrowed funds are used to plug budget holes, finance consumption, or fund political projects instead of building industries and infrastructure that can repay the debt and create jobs.
Alarmingly, this administration is now pursuing the largest single borrowing request in Nigerian history, a $21.5 billion external loan, with little transparency or cost-benefit analysis as required by the Fiscal Responsibility Act.
We are headfirst in a dangerous debt trap, but unlike in 2006, there is no clear plan to escape it.
Let’s imagine, for a moment, that the military had handed over power to the APC in 1999. Would Nigeria have secured that debt relief? Would creditors have trusted us enough to write off billions? Likely not. Progress is fragile. Poor governance can undo decades of sacrifice in just a few years.
The World Bank has warned that Nigeria’s economy must grow five times faster than its current pace to meet national aspirations.
That growth will not come from aid packages or endless borrowing. It will come from smarter policies: strengthening institutions, building trust, and negotiating trade deals that reflect our true value.
Nigeria should not just export crude oil and raw minerals. We should be leveraging these resources for technology transfer, infrastructure, and industrial growth.
We should be attracting investment in power, agriculture, and manufacturing, sectors that can unlock jobs and productivity.
Africa, and Nigeria in particular, must stop begging for crumbs when we already have the ingredients for a feast.
The future will not be kind to leaders who return their people to poverty with borrowed slogans and empty hands. Debt relief once gave us a new beginning. If we squander it, history will not forgive us.
Nigeria does not need another loan. It needs leadership with discipline, vision, and the courage to harness our resources. The lesson is clear: either we relearn it, or we crawl backwards into another lost decade.
Allen is a writer and educator who resides in Kano. He writes on public affairs and promotes good governance.
