Nigeria’s escalating debt profile By Ayo Oyoze Baje

The recent warning signal raised over Nigeria’s ever escalating debt profile by the President of the African Development Bank, Dr. Akinwumi Adesina, should be food for thought for our policymakers and those who implement them. According to Adesina, Nigeria is currently using 50% of its revenue to service its debts, compared to the average of 17% for other African countries! This is unsustainable. But this is just part of an economic malaise that has consigned millions of Nigerians to “multidimensional poverty” even as a few favoured ones continue to enjoy the nation’s wealth.


Furthermore, going by the frightening figures recently released by the Debt Management Office, the total debt stock stood at some humongous N24.047tn as of March 31, 2019. While that of the Federal Government stood at N17,086tn, that of the states, including the Federal Capital Territory, amounted to N 7,860tn Reports have it that N560bn, out of this, was borrowed in only three months!

As of September 2018, the debt stood at N22.43tn. But as of June 30, 2015, the country’s total debt was N12.12tn. That means that within the first three and a half years of the current administration, the debt rose by N10.31tn, which is 85.06 %. According to the DMO, the external debt component of both the federal and state governments including the FCT increased by 109.21%..



We surely do not need rocket science to understand that the country’s economic growth is undermined by the huge debt stock as well as other obvious factors including sheer profligacy in running government.  Corruption in high places and the outlandish remuneration of political office holders, with that of our lawmakers ranking amongst the highest in the world, have contributed in making Nigeria the poverty capital of the world.

Recall that in June 2017, experts, including Prof. Pat Utomi and   Mr. Bismarck Rewane, had expressed a similar worry over the increasing debt burden at both the state and federal levels. Indeed, I had to write an opinion essay entitled, “Who will pay these huge debts?” in July 2017 as a follow-up to an earlier one, “Nigeria’s debilitating debt profile” in January 2013. But, the situation has only worsened over the years.

For instance, as of September 30, 2012, the external debt jumped to $6.2 billion,  with a domestic debt profile of N6.3tn. Yet, back then, the state governors were still asking for an additional $7bn external loan! Fast forward to 2017. As of March 2012, the nation’s total debt had risen by N7.1tn to a mind-boggling N19.16tn. Incidentally, Yemi Osinbajo, who was then the acting President,  had, through a letter to the National Assembly, requested that  $1.94bn loans be approved for 10 states. The explanation given was that the huge sum was meant for projects from the 2016 to 2018 External Borrowing (Rolling) Plan of the Federal Government for the concerned states.

This rather scary economic situation throws up some salient questions, all begging for answers. Have we, as a country, not been making money from crude oil sales over the past few years?  What about the huge revenues from other sources such as the multiple company taxes including VAT, inflows from the ports and the customs?

Where have all these gone in the face of dilapidated infrastructure, annual budget deficits, fragile healthcare system and a drastic dip in the standard of education across the country? With 23 out of 36 states unable to pay salaries to civil servants as and when due, in spite of the so-called bailouts, one cannot but remember the question Prof. Ayodele Awojobi (of the blessed memory) asked the Alhaji Shehu Shagari administration: “Where has our oil money gone?” Your guess is as good as mine.

Besides, many of the commercial banks are not lending to the real sector to boost manufacturing. Sundry consumables including textile materials and electronic equipment, especially from China and other South-East Asian countries, are either being imported daily at astonishing rates, or smugglers are having a field day. All these have no doubt led to an unprecedented unemployment level and an upsurge in the wave of crimes including armed robbery, kidnapping, banditry, arson and ritual killings!

One’s current concern, however, is who will pay these huge debts? Will the burden being left by the reckless and frivolous political class not be too weighty for the lean shoulders of our jobless children? Will they not be turned to slaves and beggars in their own country by the creditor nations, just because they want to pay off the debts left by the locusts that have ravaged our common patrimony? But that is not all.

The ordinary Nigerian cannot understand why in spite of the  huge loans, monthly allocations and bailouts, not a few state governors cannot pay staff salaries as and when due. Power supply is still epileptic and critical infrastructure in utter decay.



One is surprised too about the speed with which governors go for questionable bonds at the end of their tenures. What is the guarantee that the incoming administrations and the subsequent ones would have the capacity to repay without harming the security and welfare of the citizens which are their primary reasons of being in government? The earlier we started having credible answers to these burning questions, the better for us all.

Ayo Oyoze Baje, Ikeja, Lagos