Naira depreciation, not fresh borrowing, drove debt surge — Oyedele

Nigeria's public debt has significantly increased, but much of the rise stems from the naira's depreciation and accounting adjustments rather than substantial new borrowing, Finance Minister Taiwo Oyedele told the Senate Committee on Finance. He cautioned against direct comparisons of debt figures without considering the impact of currency devaluation.

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When this administration came into office, public debt was around ₦75 trillion. Many people simply compare that figure with today’s debt stock and conclude that this government has borrowed massively.

Oyedele explained that the naira's depreciation alone added over 40 trillion naira to the public debt's value. Additionally, the securitization of "Ways and Means" advances inherited from the previous administration, approved by the National Assembly, brought approximately 33 trillion naira of existing obligations onto the government's official debt records. He clarified that this was not new borrowing but a reclassification of past liabilities.

The minister asserted that the current administration employs a cautious borrowing strategy, prioritizing infrastructure financing and long-term economic growth while maintaining sustainable debt levels. He views debt as leverage, expecting borrowed funds to generate more value than their cost. A significant portion of domestic borrowing is used for refinancing maturing debts, not for accumulating new obligations.

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It was not new borrowing; it was simply bringing previously existing obligations onto the official debt books. These factors have not always been properly explained, which is why the reported public debt appears much larger.

During the briefing, senators also raised concerns about the slow implementation of the capital component of the 2026 Appropriation Act. Senate Chief Whip Tahir Monguno and Senator Adamu Aliero urged acceleration in capital project execution.

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We see debt as leverage. Every naira and every dollar borrowed should generate more value than the amount borrowed.