Rising Debt Servicing Threatens Development — Obi

Presidential hopeful of the National Democratic Congress (NDC), Mr. Peter Obi, has raised concern over Nigeria’s rising debt profile, warning that increasing debt servicing obligations are crowding out investments in critical sectors such as health, education, and poverty reduction.

Obi was reacting to comments attributed to President Bola Ahmed Tinubu during a recent foreign trip, where the President reportedly said Nigeria would spend about $11.6 billion on debt servicing. 

Obi said the figure reflects a “worrying fiscal situation” that requires urgent national attention and stronger fiscal discipline.

He argued that borrowing is not inherently negative if it is directed toward productive investments capable of generating long-term economic growth. 

He cited countries such as Japan, the United Kingdom, the United States, the United Arab Emirates, Singapore, and Indonesia as examples of economies that sustain high debt levels while channelling funds into infrastructure, education, healthcare, and innovation.

According to him, Nigeria’s borrowing pattern has been less productive, claiming that a significant portion of past loans has gone into consumption rather than development outcomes. He also expressed concern over rising debt stock under the current administration.

Obi listed recent external borrowing commitments, including about $6 billion in total external loans made up of $5 billion from First Abu Dhabi Bank in the UAE and $1 billion via UK Export Finance through Citibank London, as well as a proposed $1.25 billion World Bank facility and an additional $516 million arranged through Deutsche Bank, bringing recent external borrowing commitments to about $7.8 billion. He also referenced continued domestic borrowing through regular bond issuances.

He further pointed to budget figures suggesting that debt servicing, estimated at about ₦17 trillion to ₦18 trillion depending on exchange rate assumptions, is nearly three times the combined allocations to health (₦2.46 trillion), education (₦2.56 trillion), and poverty alleviation (₦865 billion).

Obi described the imbalance as a serious fiscal concern, warning that debt obligations are increasingly displacing spending on human capital development. He also questioned the effectiveness of capital releases, suggesting that even approved funds for key sectors are not always fully disbursed or efficiently utilised.

He stressed that borrowing itself is not the core issue, but rather whether borrowed funds are converted into productivity, inclusive growth, and improved living standards for citizens.

He concluded that without such outcomes, debt servicing could become a long-term structural burden on Nigeria’s economy.