Former Labour Party presidential candidate Peter Obi, former Vice President Atiku Abubakar and economist Dr Paul Alaje have raised fresh concerns over Nigeria’s rising debt burden, warning that heavy debt servicing could weaken investment in health, education, poverty reduction and other key sectors.
The concern followed President Bola Tinubu’s recent disclosure during a foreign engagement that Nigeria would spend about $11.6 billion on debt servicing. Based on prevailing exchange rates, Obi estimated that the figure could translate to about ₦17 trillion to ₦18 trillion, a level he said raises serious questions about the country’s fiscal priorities.
In a statement released on Monday, May 18, Obi said borrowing was not necessarily the problem. According to him, the real issue is whether borrowed funds are being used for productive purposes that can grow the economy and improve the lives of citizens.
He noted that many developed and emerging economies, including Japan, the United Kingdom, the United States, the United Arab Emirates, Singapore and Indonesia, also carry large debt burdens. However, he said those countries often channel loans into infrastructure, healthcare, education, innovation and other areas capable of generating long-term returns.
Obi argued that Nigeria’s case was different because much of the country’s borrowing had gone into consumption, with limited visible impact on ordinary citizens.
The former Anambra State governor also claimed that a significant part of the debt currently being serviced was accumulated under the present administration, while fresh borrowing had continued through domestic and foreign channels.
He listed recent external borrowing commitments to include about $5 billion from First Abu Dhabi Bank in the United Arab Emirates, $1 billion through UK Export Finance via Citibank London, a proposed $1.25 billion World Bank facility and another $516 million reportedly arranged through Deutsche Bank.
According to him, the latest known external borrowing commitments amount to about $7.8 billion, excluding domestic borrowing through bond issuances.
Obi also questioned the government’s 2026 budget priorities. He said health was allocated ₦2.46 trillion, education ₦2.56 trillion, and poverty alleviation ₦865 billion, bringing the combined allocation for the three sectors to about ₦5.885 trillion.
By comparison, he said projected debt servicing obligations of about ₦17 trillion to ₦18 trillion were nearly three times higher than the combined allocation for health, education and poverty reduction.
“This imbalance highlights a troubling fiscal reality in which debt obligations increasingly crowd out investment in human capital and poverty reduction,” Obi said.
He also warned that budgetary allocations to critical sectors may not be fully released or efficiently used, making the gap between spending promises and actual impact even wider.
Atiku, in a separate statement issued through his media aide, Olusola Sanni, criticised what he called the Federal Government’s “industrial-scale borrowing” at a time when many Nigerians are struggling with high living costs.
“This borrowing binge is becoming reckless, opaque and dangerously habitual. The loans are accumulating at a burden too heavy for Nigerians to bear,” Atiku said.
The former vice president said Nigerians had repeatedly been told that new loans would improve infrastructure, electricity supply and economic recovery. However, he argued that many citizens still face poor power supply, bad roads, rising business costs and worsening hardship.
He urged the World Bank and other international lenders to apply stricter safeguards before approving fresh loans for Nigeria. According to him, creditors should insist on clear terms, measurable outcomes and stronger accountability.
Dr Paul Alaje, Chief Economist at SPM Professionals, offered a more technical view of the debt debate. He said borrowing should not automatically be seen as a crisis, but warned that the sustainability of any loan depends on repayment capacity and economic value.
“Borrowing is not leprosy. Borrowing itself is neither good nor bad,” Alaje said.
He explained that one key global measure is the ratio of debt servicing to government revenue. According to him, a country should ideally not spend more than one-third of its revenue on debt servicing.
Alaje said Nigeria once spent more than 90 per cent of its revenue on debt servicing under the previous administration. He noted that the figure had reduced under the current government but remained above 60 per cent, which he described as a concern.
He warned that borrowing for consumption would only worsen the country’s position.
“No borrowing should go into consumption. It is a waste of money. In fact, it brings the country on its knees,” he said.
The debate now centres on a key question: whether Nigeria’s rising debt is producing enough growth to justify the burden. For Obi, Atiku and Alaje, the danger is not borrowing alone, but borrowing without visible productivity, stronger revenue and clear benefits for citizens.