Nigeria’s external debt hits $145bn as servicing burden rises — World Bank

How Bola Tinubu's economic policies and fiscal management have contributed to the rise in Nigeria's national debt profile and structural economic pressures… 1. The Currency Floating & Paper Revaluation Shock When President Tinubu took office in May 2023, the official exchange rate was pegged at approximately ₦461 to $1 USD. Following the Central Bank of Nigeria's (CBN) decision to float the currency and unify FX windows, the exchange rate rapidly depreciated to between ₦1,450 – ₦1,600+ per $1 USD in subsequent years. The Debt Multiplier Effect: A substantial portion of Nigeria’s total public debt is external (denominated in foreign currencies like USD, EUR, and SDRs). When converting foreign liabilities into domestic currency for accounting, the sharp currency drop automatically inflated the national debt in Naira terms.  The Numbers: Total public debt surged from approximately ₦97.3 trillion in late 2023 to upwards of ₦144.6–₦159.2 trillion, despite foreign currency debt remaining relatively stable in actual dollar terms.  2. Soaring Debt-Servicing Ratios The combination of a devalued Naira and high interest rates heavily elevated the local cost of servicing both external debt and domestic debt obligations.  Revenue Absorption: Debt service payments climbed rapidly, consuming a critical portion of federal revenue. In 2024, debt servicing absorbed upwards of ₦8.92 trillion.  Crowding Out Capital Projects: With such a high percentage of retained government revenue going strictly to interest payments, less than 30% of total budgetary spending could be allocated toward physical infrastructure and public services.  3. Escalating Budget Deficits & Expanding Borrowing To offset the gap created by high expenditure demands and debt servicing, the administration has consistently submitted budget plans relying on large debt financing. Fiscal Deficit Spikes: Budget deficits expanded significantly, requiring large domestic bond issuances alongside new multi-billion dollar external loan requests from multilateral lenders.  Per Capita Debt Inflation: Driven by continuous borrowing to fund recurrent expenditures and deficit gaps, Nigeria's per capita debt ratio expanded dramatically—rising from roughly ₦88,800 a decade ago to over ₦716,800 per citizen. 4. Policy Shock, High Inflation, and Reduced Consumer Spending The simultaneous removal of the PMS (petrol) subsidy and the devaluation of the Naira created a severe cost-of-living crisis across the country: Inflationary Spiral: Headline inflation surged past 30%, driven by skyrocketing fuel and transport costs alongside elevated prices for imported capital goods, manufacturing inputs, and food. Monetary Tightening: To combat runaway inflation, the CBN raised the Monetary Policy Rate (MPR) into high double-digit territory (reaching 26.5% before minor easing). This increased borrowing costs for domestic businesses, reduced private sector credit expansion. VOTE NDC… VOTE PRESIDENT PETER OBI.

Peter Obi's fiscal framework and public governance philosophy center on four key pillars that proponents and economic analysts highlight as potential drivers for curbing debt accumulation and restructuring Nigeria's balance sheet: 1. Shifting from "Consumption to Production" (Productive Borrowing) Obi’s central economic thesis is transitioning the economy away from revenue-consuming practices toward export-led production. The Debt Impact: Obi maintains that borrowing is not inherently bad if capital is directed into high-yield, revenue-generating investments like STEM education, manufacturing, agriculture, and power infrastructure. By using debt strictly to build productive capacity rather than funding recurrent government costs, the national output (GDP) expands, expanding the revenue base needed to service and write down debt over time.  2. Aggressive Reduction in the Cost of Governance A hallmark of Obi's governance record as Governor of Anambra State was strict fiscal discipline, eliminating executive waste, and reducing institutional overheads. The Debt Impact: He advocates for full implementation of the Oronsaye Report to merge overlapping government agencies, cut down on non-essential official spending, and eliminate administrative leakages. Reducing operational expenses lowers annual fiscal budget deficits, directly decreasing the federal government's need to take on new domestic and external loans to meet basic recurrent expenses.  3. Tax Base Expansion Over Multiple Taxation Rather than relying on additional high interest-rate debt borrowings or introducing new tax levies, Obi advocates for consolidating and widening the tax net.  The Debt Impact: By integrating tax databases across federal and state levels and curbing illegal collections by non-state actors, government revenue collection improves without placing punitive loads on small businesses. Higher non-oil tax revenues improve the sovereign debt-to-revenue ratio, allowing the state to service existing debt from internal earnings rather than deficit borrowing. 4. Direct Support for MSMEs and Value-Chain Agriculture Obi argues that Nigeria's highest economic leverage sits with Micro, Small, and Medium Enterprises (MSMEs) and agricultural processing value chains. The Debt Impact: Supporting small businesses and local food processing drives job creation and reduces total reliance on imported goods. Strengthening domestic output helps stabilize the trade balance and protects foreign exchange reserves, easing pressure on the Naira and preventing the massive paper-debt inflation that occurs when local currency devalues against foreign debt liabilities. VOTE PRESIDENT PETER OBI… VOTE NDC AND HAVE PEACE OF MIND.. GO AND GET YOUR PVC TODAY.