Former President Olusegun Obasanjo has strongly censured the federal administration under President Bola Tinubu for its relentless accumulation of local and international credit to fund the national budget and various infrastructural projects. The former Nigerian leader cautioned that unbridled borrowing poses an existential threat to the prosperity of upcoming generations.
Speaking at a public discourse in Abeokuta, the capital of Ogun State , Mr Obasanjo contended that leaning heavily on external creditors, particularly the World Bank and the International Monetary Fund (IMF), offers no genuine remedy for Nigeria's core economic difficulties. He maintained that these multilateral bodies were never established to salvage the country's peculiar socioeconomic structure.
What are the details of the administration's borrowing plans?
The current administration has consistently turned to both local debt instruments and foreign loans to bridge budgetary deficits and fund capital projects, routing multiple credit requests through the National Assembly .
Recently, President Tinubu approached the federal legislature seeking authorization to process external credit amounting to $20,517,755,901 and €1,045,083,643 under the 2026–2027 Supplementary External Borrowing Plan. This followed an earlier legislative approval for a $516.3 million facility from Deutsche Bank AG earmarked for the Sokoto–Badagry Superhighway, a flagship undertaking tied to the Renewed Hope Agenda.
Additional borrowing approvals earlier in the year included a $6 billion external package. Out of this sum, $5 billion was sourced from First Abu Dhabi Bank for budgetary backing, while a $1 billion export finance facility coordinated by Citibank was designated for rehabilitating the Tin Can Island Port and the Lagos Port Complex.
In defence of these fiscal measures, President Tinubu has repeatedly argued that strategic borrowing is vital for building durable infrastructure and unlocking long-term economic potential. During a recent interaction at the State House, the president dismissed concerns by stating, "If we have to borrow, we borrow. Borrowing is not leprosy, we just have to work hard to be able to pay for it."
Why did Obasanjo reject the president's debt comparison?
Replying to the president's analogy, Mr Obasanjo dismissed the comparison between public debt and leprosy as entirely flawed, asserting that financial liabilities carry far graver consequences for society.
"And for anybody to say debt is no leprosy, is absolute nonsense. Debt is worse than leprosy. Because leprosy destroys only one person. Debt destroys generations," the former leader declared.
Mr Obasanjo also criticised the rapid depreciation of the national currency, reflecting on how the exchange rate stood at N1 to $1.85 when he established his agricultural enterprise 47 years ago, contrasting it with current economic realities.
Furthermore, he questioned the depth of knowledge among current political officeholders and warned against the uncritical implementation of foreign economic policies that fail to account for domestic realities.
What is Nigeria's wider debt context?
Nigeria's overall debt profile has expanded significantly over the years as successive governments rely on borrowing to plug fiscal gaps. While government officials maintain that the country's debt-to-GDP ratio remains within manageable thresholds compared to peer nations, fiscal analysts continue to express worry over shrinking government revenues and high debt-service burdens.
International financial bodies have frequently advised the Nigerian government to widen its non-oil revenue base, optimize tax collection mechanisms, and ensure that borrowed capital is channeled strictly into productive assets that generate tangible economic returns.