The mounting debt burden should terrify Nigerians, by Dele Sobowale
•Tinubu seeks $20.5bn; €1.04bn foreign loans to fund projects – Vanguard, October 28, 2026
•Debt worse than leprosy, Obasanjo replies Tinubu — Report, October 31, 2026
Seldom do I find myself on the same side with former President Obasanjo on matters concerning national affairs. Right now, I am on all fours with Baba Iyabo with regard to his position on President Tinubu’s request for fresh loans amounting to over $21 billion or N29.4 trillion. The debt burden is now approximately N160 trillion. Given a shamelessly rubber stamp Senate, it is a foregone conclusion that it will be approved. By December, the total debt would total N189.4 trillion. It was about N100 trillion when Buhari left the nation’s “economy on the brink of bankruptcy” – according to Tinubu.
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Putting the request into historical perspective would help to understand the loan request better. From 1978, under General Obasanjo, when the first $2.8 billion loan was taken, it took the country 21 years until 1999 to accumulate $36 billion or N50.4 trillion at current exchange rates. Minister of Finance, Dr Ngozi Okonjo-Iweala got us out of the debt trap in 2004. By the time President Jonathan left office in 2015, the debt had risen to $30 billion or N42 trillion once again. Eight years of Buhari’s financial mismanagement racked up N58 trillion. By the time this fresh loan is approved and taken, Tinubu would have added N89.4 trillion in just three and a half years; and, this might not be the last loan request before May 29, 2027. Whoever is President next year might be facing a debt burden well over N200 trillion.
When last year I wrote that borrowing is the opium of the governing classes, it never occurred to me that the addiction could be as bad as this. Obasanjo is absolutely correct; mindless borrowing, tainted with corrupt and concealed self-interest, is indeed worse than leprosy. Lepers sometimes have children without leprosy. The malady is invariably restricted to one person and one generation. Nigeria’s debt load, made infinitely worse by Tinubu’s fiscal policy mismanagement, is already visiting diseases more virulent than leprosy on millions of Nigerians alive; and will savage millions more for at least three generations for one inescapable reason – inability to repay from revenue generation.
Revenue collection and ability to repay loans
“Nigeria misses 10-month revenue target by N20.7tn” – Report, October 27, 2026.
The report which must have been glossed over by most Nigerians, when taken in conjunction with a previous one which announced that debt repayment exceeded revenue collected, should raise alarm everywhere. Despite all the attempts to mislead Nigerians, the fact is; the Federal Government, FG, is living on borrowed funds. Nigeria is unable to pay its bills and repay loans, as and when due, without resorting to more loans. Like all addicts, this nation is hooked on loans and would suffer a major shock if borrowing stops.
No nation develops rapidly by borrowing alone. That is a verdict of economic history which cannot be disputed. Another axiom of economics stipulates that governments must take the lead and determine the directions of growth and development; and not leave them to the haphazard and un-coordinated plans of the private sectors. Our current experience with the Dangote Refinery should serve as a lesson regarding what can happen when the government abdicates its role as the driver of the directions of growth to individual investors. Given unclear government guidelines with regard to production, pricing and distribution of fuel, Dangote is at liberty to export fuel – even when acute global scarcity induces high fuel prices locally. Consequently, the FG is forced to make promises which cannot be kept – reduced transport fares from October 1, more CNG vehicles, subsidized fuel for 30 days. Each failure reinforces distrust of government and makes it more difficult to stimulate support.
Monetary policy management under the current Governor of the Central Bank of Nigeria, CBN, is the only aspect of the government which is encouraging foreign investors. The other areas of reform are not working so well – for the simple reason that fiscal policy management is falling short of expectations. Few people would have believed, until it happened, that Tinubu, a proclaimed accountant, would mismanage the annual budget worse than Buhari. Under Buhari, one year’s budget was extended by no more than six months. The 2025 Budget will run until December 2026; nobody is certain, if and when the 2024 Budget ended. Capital appropriations for 2024 and 2025 were less than five per cent of the amounts budgeted; and 2026 is already following the same pattern. Again, it has been demonstrated worldwide that rapid economic and social development is only possible with unrelenting infrastructural development.
Three years’ performance unconvincing
“LOANS: It’s not how much we borrow, but what we build – TINUBU” -Vanguard, October 30, 2026.
Tinubu elaborated on that statement: “The real question is not how much we borrow, but what we build, what value we create and what future we leave behind.” The statement is half true and half untrue. Obasanjo called it “nonsense”. I won’t go that far. Tinubu is absolutely correct when he asserted that “it is not how much we borrow but how much we build”. His references to the Lagos-Calabar, Sokoto-Badagry and Trans-Sahara highways exposed the weakness in his defence. Highways – Sokoto-Badagry for example – have been started before and abandoned later. The Sokoto-Badagry road, in particular, brings painful memories to my family. Started by Obasanjo in the mid-1970s, my immediate senior brother, Adebowale Sobowale, working for Texaco, was killed on the road, under construction on November 25, 1978. It was abandoned shortly after Shagari became President. The fact that construction starts does not guarantee completion. Governor Jakande started monorail in Lagos; Buhari cancelled it; Shagari embarked on the Third Mainland Bridge; Buhari stopped it; Babangida completed it. The truth is: with long-term and expensive projects, nothing is certain until they are completed.
Even completion does not ensure economic feasibility or financial viability. Labour Transport, bank-rolled by the FG when Oshiomohle was President, never returned a kobo on investment. Over thirty airports and airstrips exist in Nigeria; only four are viable. The FG is now busy acquiring those disasters. Mere existence will not transform Kogi or Nasarawa airports to investment from absolute waste of public funds. Clearly, you can build; but “what we build” might constitute a heavier debt burden than a profitable investment creating jobs and increasing national wealth. We have seen it happen before. The Nigerian Airways was established with the intention of projecting the country abroad, creating jobs and making money as well. It ended in receivership, wiped out jobs and impoverished some of its creditors. All the governments involved in all those failed enterprises also once thought of “what future we leave behind”. Go to Ajaokuta and see what previous FGs left behind.
My real fear
“Habit is stronger than reason” – Professor William Dorfmann.
My real fear is this; given a government addicted to debt, and given the addict’s habit of spending every kobo at hand, the new loan might not even be spent on the projects stated.
What has Tinubu built with N60 trillion already borrowed?
Vanguard News
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