By LaBode Obanor
The Nigerian Senate recent approval of President Bola Tinubu’s ₦1.77 trillion ($2.2 billion) external loan request is yet another troubling chapter in the government’s reckless borrowing spree. While the administration claims this loan will partially finance the ₦9.7 trillion budget deficit for 2024, it raises critical questions about the country’s chronic reliance on external borrowing and the lack of fiscal discipline that has led to an unsustainable debt burden.
A Legacy of Fiscal Mismanagement
For years, successive Nigerian governments have leaned heavily on borrowing as a lazy alternative to addressing systemic economic challenges. Instead of creating innovative and sustainable revenue streams or tackling the rampant corruption that bleeds public finances, the government continues to dig the country deeper into debt.
The situation has reached an alarming stage: in just the first nine months of 2024, Nigeria spent $3.58 billion on foreign debt servicing, marking a staggering 39.77% increase compared to the same period in 2023. These debt obligations now consume an overwhelming share of national revenue, leaving little room for meaningful investments in social and economic development. This cycle of borrowing without clear accountability or measurable impact has made Nigeria a textbook example of fiscal irresponsibility.
The Human Cost of Debt Dependency
Every naira spent on debt servicing is a naira that could have been invested in improving the lives of Nigerians. This unchecked borrowing and escalating debt servicing costs have direct consequences on social justice. Millions of Nigerians are being pushed further into poverty, with critical sectors like education, healthcare, and infrastructure grossly underfunded.
The lack of investment in these areas perpetuates inequality, with women, youth, and rural communities disproportionately affected. At a time when many Nigerians are struggling to survive, the government’s continued reliance on foreign loans—without addressing the root causes of fiscal deficits—represents a betrayal of its responsibility to prioritize the welfare of its citizens.
Debt Without Accountability
One of the most glaring issues with Nigeria’s borrowing practices is the lack of transparency. The public is often kept in the dark about how borrowed funds are utilized, with no clear mechanisms for tracking or evaluating their impact. Who benefits from these loans? How are they improving the lives of everyday Nigerians? These are questions that remain unanswered, further fueling public distrust.
It is not enough for the Senate to rubber-stamp borrowing requests without demanding a detailed and publicized plan for repayment and the specific developmental outcomes these loans are meant to achieve. The absence of such accountability creates fertile ground for mismanagement and corruption.
A Broken System in Need of Reform
Nigeria’s debt crisis is not just a financial issue—it is a symptom of deeper systemic failures. The government must abandon its addiction to borrowing and take bold steps to fix the structural problems plaguing the economy. This includes:
Expanding Domestic Revenue: Instead of relying on loans, the government must diversify the economy and implement reforms to boost domestic revenue generation. The over-reliance on oil revenues is no longer sustainable.
Cutting Waste and Corruption: Nigeria loses billions of dollars annually to corruption and inefficiency. Addressing these leakages would free up resources to fund essential services without resorting to loans.
Prioritizing People-Centered Budgets: The government must allocate resources toward programs that directly impact the lives of ordinary Nigerians, including healthcare, education, and job creation.
Conclusion: A Call for Fiscal Responsibility
The approval of President Tinubu’s loan request underscores the urgent need for a national reckoning on Nigeria’s borrowing practices. This unsustainable approach to governance is pushing the country to the brink of economic collapse while eroding trust in the government’s ability to act in the best interest of its people.
It is time for Nigerian leaders to embrace fiscal responsibility, prioritize transparency, and focus on sustainable economic policies that uplift the nation rather than mortgage its future. Anything less is an abdication of their duty to the people they serve.
LaBode Obanor is a Social Justice Advocate
The opinions expressed in this essay are solely those of the author and do not necessarily reflect the views of the League for Social Justice.
Email: Jlabode74@gmail.com
X: @Obanor
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