Nigeria's debt crisis: Borrowing to survive, not build

Nigeria faces a stark fiscal reality as its total public debt climbed to N159.35 trillion by March 2026, according to the Debt Management Office. While the government insists borrowings under President Bola Tinubu are not as high as reported, the composition of the debt reveals a troubling shift. Domestic debt now accounts for 54.85% of the total portfolio, an increase that signifies a redistribution of financial strain rather than a reduction.

This heavy reliance on domestic borrowing means that funds crucial for private sector growth, such as loans for manufacturers and small businesses, are being diverted to government spending. In the first nine months of 2025 alone, the Tinubu administration borrowed N11.89 trillion, surpassing its target by approximately N1.54 trillion. Alarmingly, only 17.66% of this amount, or N3.10 trillion, was allocated to capital expenditure, leaving 82.34% of planned capital projects unfunded.

The allocation of the remaining borrowed funds remains unexplained, raising questions about whether the money was used for recurrent expenditure, official entertainment, or even election campaign activities. The government's silence on this matter is interpreted as complicity in a deepening fiscal crisis.

Furthermore, debt servicing has become a crippling burden, consuming 67% of federal revenue in the first nine months of 2025. This indicates that Nigeria is borrowing to sustain itself rather than to invest in growth-generating assets. President Tinubu's disclosure that Nigeria will spend nearly half its projected revenue on debt servicing in 2026 underscores the severity of the situation. This is not development financing; it is a strategy of deferred poverty, with the government continuing to borrow without apparent regard for future consequences.