President Bola Ahmed Tinubu's administration has embarked on an aggressive borrowing campaign that has added billions to Nigeria's debt burden, raising concerns among economists about long-term fiscal sustainability as Africa's most populous nation grapples with declining revenues and mounting service delivery failures.
Nigeria has secured multiple loans since Tinubu took office in May 2023, including substantial borrowing from the International Monetary Fund (IMF), World Bank, and bilateral creditors. The government has justified the loans as necessary for infrastructure development, budget support, and economic stabilization following years of stagnant growth and revenue shortfalls.
According to the Debt Management Office (DMO), Nigeria's total public debt reached approximately $115 billion as of the end of 2025, with the debt-to-GDP ratio climbing to around 42%—a level that approaches concerning thresholds for emerging economies with Nigeria's revenue constraints.
"The real issue isn't the absolute debt level, but our capacity to service it," explained Dr. Murtala Salihu Sagagi, an economist at Abuja's Policy Development Centre. "Nigeria's revenue-to-GDP ratio remains stubbornly low at around 8-10%, one of the lowest in the world. We're borrowing heavily while our ability to generate revenue continues to decline."
Nigeria's debt service costs have consumed an increasing share of federal revenues, with some estimates suggesting debt service obligations exceeded 90% of government revenue in recent fiscal periods. This crowding-out effect leaves minimal resources for healthcare, education, infrastructure maintenance, and security—the very sectors citizens expect government to prioritize.
The borrowing spree reflects a broader challenge facing African nations. Several countries across the continent have seen debt levels surge following the COVID-19 pandemic, commodity price fluctuations, and currency pressures. Ghana, Zambia, and Ethiopia have all faced debt distress, requiring restructuring agreements with creditors.
"Nigeria isn't unique, but its scale makes the stakes higher," noted an analyst with Lagos-based SBM Intelligence. "With over 200 million people, a Nigerian debt crisis would have regional implications. The question is whether borrowed funds are generating returns that improve revenue capacity."
That question has fueled public criticism, as many Nigerians see little evidence that massive borrowing has translated into visible improvements. The naira has weakened dramatically, inflation remains above 30%, unemployment stays elevated, and infrastructure deficits persist. Public hospitals lack basic supplies, teachers remain underpaid, and security forces struggle with inadequate equipment.
Social media posts highlighting alleged misuse of borrowed funds—including claims that loan money finances electoral activities rather than development projects—have intensified public skepticism. While such specific allegations are difficult to verify, they reflect widespread frustration with the disconnect between borrowing levels and service delivery.
The Tinubu administration argues that previous governments neglected critical investments, leaving current leadership to address accumulated deficits. Officials point to plans for railway expansion, port modernization, and power sector reforms as justification for current borrowing levels.
However, economists emphasize that borrowing for development only makes sense if projects generate economic returns that enhance revenue capacity. "If we borrow $10 billion for infrastructure that enables $15 billion in additional economic activity and tax revenue, that's sustainable," explained one economist. "If we borrow $10 billion that disappears into poorly executed projects or non-productive uses, we've simply mortgaged the future."
Nigeria's oil-dependent revenue model compounds debt sustainability concerns. Despite being Africa's largest oil producer, Nigeria has struggled to maximize petroleum revenues due to production challenges, theft, and underinvestment. The government's removal of fuel subsidies in 2023—a politically painful decision—was meant to free up resources, but savings have been offset by increased debt servicing and currency depreciation.
In Nigeria, as across Africa's giants, challenges are real but entrepreneurial energy and cultural creativity drive progress. Yet addressing debt sustainability requires more than entrepreneurial dynamism—it demands fiscal discipline, revenue expansion, and ensuring borrowed funds actually strengthen economic fundamentals rather than simply delay difficult choices.
International lenders have begun emphasizing governance reforms and transparency as conditions for continued support. The IMF and World Bank have pushed Nigeria to improve tax collection, reduce corruption, and implement structural reforms that could broaden the revenue base beyond oil dependency.
The administration faces a difficult balancing act: Nigeria genuinely needs infrastructure investment and budget support, but accumulating debt without corresponding improvements in revenue generation or service delivery risks a fiscal crisis that would devastate the country's 200+ million citizens.
As regional neighbors like Ghana undergo painful debt restructuring processes that have squeezed public services and living standards, Nigeria's trajectory serves as a test case for whether Africa's largest economy can manage debt sustainably or whether it too faces an inevitable reckoning with fiscal reality.
