Olu Allen
Nigeria’s debt conversation has become dangerously normalized. Every few months, new loan approvals quietly pass through the headlines with little sustained scrutiny, as though borrowing itself has become a substitute for economic strategy.
Since assuming office, the administration has continued Nigeria’s deep dependence on multilateral and domestic borrowing, particularly from the defenders of the government, who argue that many of these loans target critical sectors such as energy, education, healthcare, and social protection.
Critics counter that Nigeria is increasingly borrowing not to transform its economy, but to manage decline.
Both sides may be partially correct.
The deeper issue is not simply debt accumulation. It is whether Nigeria is generating productive value from these loans sufficient to justify the burden being placed on future generations.
Take the $750 million loan earmarked for renewable energy expansion. On paper, the logic is compelling. Nigerian businesses are suffocating under diesel costs, while unstable electricity continues to cripple industrial productivity. Investment in alternative energy should theoretically reduce operating costs and stimulate growth.
Yet the ordinary citizen still asks a painfully simple question: where is the electricity?
If billions are borrowed in the name of power reform while grid collapses remain routine and manufacturers continue to rely on generators, then investment risks becoming indistinguishable from consumption.
The same contradiction appears in the $700 million loan allocated to girls’ secondary education. No serious nation can develop while neglecting female education. The long-term socioeconomic benefits are well documented.
However, public frustration stems from the disconnect between policy language and material reality. In communities where schools lack desks, teachers remain unpaid, and parents struggle to afford meals, citizens increasingly view large development loans as abstract bureaucratic exercises disconnected from everyday survival.
More controversial are the empowerment-focused interventions such as the $500 million Nigeria for Women Programme. At a time of severe inflation, widening insecurity, and collapsing purchasing power, legitimate questions emerge about national priorities.
Should a heavily indebted country continue borrowing extensively for donor-aligned social programmes while core state functions remain fragile? Or has Nigeria become trapped in a development culture where externally fashionable initiatives receive financing more easily than structural economic transformation?
Even the $1.57 billion facility for healthcare and climate resilience, important as both sectors are, exposes a difficult truth about the Nigerian state: basic public welfare increasingly depends on credit.
Perhaps the most politically revealing facility, however, was the $800 million loan secured to cushion the effects of fuel subsidy removal.
The subsidy was removed on the argument that Nigeria could no longer afford its fiscal burden. Yet the government almost immediately sought fresh borrowing to absorb the social consequences of the policy.
This contradiction remains difficult to ignore.
If the transition itself required emergency external financing to prevent deeper social distress, then questions naturally arise about whether sufficient structural preparation existed before implementation.
Beyond external debt lies an even quieter danger: aggressive domestic borrowing.
As government expands its appetite for treasury bills and bonds, local banks naturally prefer lending to the state rather than to private manufacturers, farmers, or industrial ventures.
Government borrowing, considered safer and more predictable, gradually crowds out productive private-sector credit.
The long-term consequence is severe: weaker industrial expansion, slower job creation, and an economy increasingly dependent on public spending rather than productive enterprise.
To be fair, the Tinubu administration did not create Nigeria’s debt culture. It inherited an economy weakened by subsidy distortions, low revenue generation, currency instability, and decades of structural dependence on imports.
But acknowledging inherited problems does not remove responsibility for present decisions.
The current administration has simultaneously accelerated borrowing while imposing some of the harshest economic adjustments Nigerians have experienced in decades.
Citizens are therefore enduring the immediate pain of reform, fuel hikes, inflation, declining purchasing power, and naira volatility, while the promised gains remain largely theoretical.
That is the political risk.
Great nations borrow. The United States, China, and India all leverage debt strategically for growth and infrastructure expansion. Debt itself is not inherently dangerous.
What matters is what the debt produces.
Nigeria’s challenge is that it increasingly borrows like an emerging industrial power while growing like a fragile consumption economy.
Too much borrowing still goes toward deficit financing, social cushioning, and temporary interventions rather than aggressively expanding manufacturing capacity, transportation logistics, electricity stability, agricultural processing, and export competitiveness.
In essence, Nigeria appears to be borrowing more to manage dysfunction than to permanently eliminate it.
That distinction may ultimately determine whether today’s loans become tomorrow’s prosperity, or tomorrow’s national burden.
Allen writes on public affairs and advocates for good governance.
