Former presidential candidate of the Labour Party, Peter Obi, has criticised the administration of President Bola Ahmed Tinubu over Nigeria’s rising debt profile, warning that the country is being pushed into what he described as “economic slavery” through excessive borrowing and poor fiscal priorities.
Obi raised the concerns in a statement posted on his X account on Monday under the title, “Debt Servicing, Borrowing, and Nigeria’s Fiscal Priorities,” where he questioned the Federal Government’s growing debt obligations and the impact on critical sectors of the economy.
The former Anambra State governor expressed alarm over President Tinubu’s recent disclosure that Nigeria is projected to spend approximately $11.6 billion on debt servicing in 2026. According to Obi, the huge amount allocated to debt repayment exposes a dangerous imbalance in the nation’s fiscal priorities, especially when compared to allocations for healthcare, education and poverty reduction.
President Tinubu had made the disclosure during the Africa Forward Summit held in Nairobi, Kenya, where he warned that debt servicing under the current global financial system was consuming resources that should ordinarily be invested in economic growth, industrialisation and job creation.
Speaking at the summit, Tinubu said nearly half of Nigeria’s projected revenue for 2026 would go into servicing debts, leaving limited fiscal space for developmental projects and social investments.
Reacting to the revelation, Obi argued that while borrowing itself is not necessarily harmful, it becomes dangerous when the loans are not channelled into productive sectors capable of generating long-term economic returns.
“There is nothing inherently wrong with borrowing when it is guided by prudence and directed toward productive investment,” Obi said.
He pointed out that many developed and emerging economies around the world also operate with significant debt burdens but are able to manage them effectively because their borrowings are invested in sectors that stimulate economic growth and productivity.
According to him, countries such as Japan, the United Kingdom, the United States, Singapore, Indonesia and the United Arab Emirates continue to borrow heavily, yet their debts remain manageable because they invest in infrastructure, education, healthcare, innovation and industrial expansion.
Obi maintained, however, that Nigeria’s situation is fundamentally different because much of the borrowing over the years has allegedly been spent on consumption rather than projects capable of creating sustainable economic value.
“Nigeria’s situation, however, is markedly different. A huge proportion of past borrowing has been directed toward consumption, with limited visible or sustainable developmental outcomes to justify the scale of indebtedness,” he stated.
The former presidential candidate further alleged that a substantial portion of the debt currently being serviced was accumulated under the Tinubu administration, noting that the government had continued to contract new loans despite the already rising debt burden.
He listed several recent external borrowing arrangements reportedly secured by the administration, including about $5 billion from the First Abu Dhabi Bank in the United Arab Emirates and another $1 billion from UK Export Finance through Citibank London.
Obi also referenced an additional $1.25 billion loan reportedly being considered from the World Bank as well as another $516 million arranged through Deutsche Bank.
According to him, the combined value of the latest external loan commitments stands at approximately $7.8 billion, excluding continued domestic borrowing through monthly bond issuances.
“It is also important to note that a huge portion of the debt currently being serviced was accumulated under the Tinubu administration itself, while borrowing has continued at a significant pace,” Obi said.
He argued that the scale of borrowing was becoming increasingly unsustainable, particularly because debt servicing costs were now overshadowing investments in human capital development.
Drawing comparisons with the proposed 2026 national budget, Obi said the allocations to critical sectors remained significantly lower than the projected debt servicing obligations.
According to him, the Federal Government allocated about ₦2.46 trillion to healthcare, ₦2.56 trillion to education and ₦865 billion to poverty alleviation, bringing the combined total for the three sectors to approximately ₦5.885 trillion.
By contrast, Obi noted that the estimated $11.6 billion debt servicing obligation translates to roughly ₦17 trillion to ₦18 trillion depending on prevailing exchange rates, nearly three times the combined allocations to health, education and social protection.
“This imbalance highlights a troubling fiscal reality in which debt obligations increasingly crowd out investment in human capital and poverty reduction,” he said.
Obi further lamented that even the limited funds budgeted for social sectors are often not fully released, while portions of released funds may eventually be lost through mismanagement and corruption.
According to him, the current fiscal structure risks deepening poverty, worsening unemployment and undermining long-term economic development.
He stressed that the fundamental issue was not borrowing itself but the inability of government to convert borrowed funds into measurable economic productivity and improved living conditions for citizens.
“Ultimately, the central issue is not borrowing itself, but whether borrowed funds are being converted into measurable productivity, inclusive growth, and improved living standards,” Obi stated.
“Without this, debt servicing shifts from being a temporary fiscal obligation to a long-term structural burden that constrains development and deepens economic vulnerability.”
Obi’s comments come amid growing public concern over Nigeria’s rising debt profile and the increasing proportion of government revenue being spent on servicing loans rather than funding development projects.
Recent data released by the Debt Management Office showed that Nigeria’s external and domestic debt obligations have continued to rise significantly in recent years, while inflation, unemployment and cost of living pressures remain severe across the country.
Economic analysts have repeatedly warned that unless borrowings are tied to productive investments capable of boosting exports, industrialisation and revenue generation, the country may face increasing fiscal stress in the coming years.
The Tinubu administration, however, has maintained that its economic reforms and borrowing strategy are necessary to stabilise the economy, attract investment and reposition Nigeria for long-term growth.
