SINCE Nigeria’s return to democratic governance in 1999, successive administrations have relied heavily on domestic and external borrowing as a strategy for financing development, stabilising the economy, and addressing infrastructural deficits. Loans obtained from international financial institutions and creditor groups such as the World Bank, International Monetary Fund (IMF), Paris Club, and London Club were presented as necessary instruments for national growth and economic transformation.
Governments repeatedly argued that these loans would improve infrastructure, strengthen healthcare and education, reduce poverty, generate employment opportunities, and ultimately improve the living standards of Nigerians. In many parts of the world, external borrowing has indeed contributed to industrialisation, technological advancement, and sustainable economic growth. Countries such as China, South Korea, and even several European states utilised strategic borrowing to finance productive sectors capable of generating long-term economic returns.
Unfortunately, many Nigerians believe that borrowed funds have not always been invested in productive sectors capable of improving the welfare of citizens. Instead, several projects financed through loans are either abandoned, poorly executed, or never completed despite billions allocated to them. In many instances, governments announce ambitious projects that eventually disappear without meaningful public accountability. Political analysts argue that weak monitoring systems, corruption, and policy inconsistency have prevented Nigeria from obtaining the full benefits of many externally financed projects.
In Nigeria’s case, however, the expected developmental transformation has remained largely elusive despite the huge amounts borrowed over the years. According to Nigeria’s Debt Management Office (DMO), the country’s total public debt stood at approximately ₦12.6 trillion in 2015. By the end of 2025, however, the debt had increased dramatically to about ₦159.28 trillion, while the country’s external debt rose from approximately $10.32 billion in 2015 to nearly $51.86 billion in 2025.
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Under the administration of President Bola Ahmed Tinubu, Nigeria’s debt profile expanded further as the government pursued new loans to finance budget deficits, support economic reforms, stabilise the economy after fuel subsidy removal, and fund infrastructural projects. Reports indicate that public debt increased from around ₦87 trillion in 2023 to over ₦159 trillion by late 2025.
Despite these massive borrowings, millions of Nigerians continue to experience severe poverty, unemployment, inflation, insecurity, hunger, and inadequate access to social services. Across many parts of the country, basic infrastructure such as stable electricity, functional healthcare systems, quality education, clean water supply, and good road networks remain inadequate. The contradiction between increasing national debt and worsening living conditions has become one of the most disturbing realities of Nigeria’s contemporary socio-economic condition. According to reports from the World Bank, Nigeria remains among countries with extremely high levels of multi-dimensional poverty despite its enormous natural and human resources.
This contradiction has generated serious concerns among scholars, economists, intellectuals, and ordinary citizens who continue to ask a critical question: if billions of dollars have been borrowed in the name of development, why are millions of Nigerians still living in hardship and squalor? The issue is no longer merely about borrowing itself but about the management, utilisation, and accountability surrounding public resources.
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Renowned economist, Joseph Stiglitz, argues in his influential work, Globalization and Its Discontents, that foreign loans can only produce meaningful development where strong institutions, accountability, and transparency exist. He said countries with weak institutions and poor governance often fail to translate borrowed funds into productive development because corruption and elite interests undermine economic planning.
His observations appear highly relevant to Nigeria, where allegations of corruption, contract inflation, abandoned projects, and mismanagement of public resources have become common features of governance.
Nevertheless, many economists acknowledge that borrowing itself is not entirely negative. According to the economic theories of John Maynard Keynes, public borrowing can stimulate growth during periods of economic weakness when invested productively. However, Keynes also warned that excessive debt without productive returns can create long-term financial instability. The success of borrowing therefore depends largely on transparency, accountability, effective governance, and strategic investment in sectors capable of generating sustainable economic growth.
Similarly, economist, Jeffrey Sachs, emphasises in The End of Poverty that poverty reduction requires more than financial borrowing. Sachs argues that sustainable development depends on effective leadership, investment in infrastructure, human capital development, sound economic planning, and productive institutions. In his view, external loans alone cannot transform a nation unless the resources are invested strategically in sectors capable of generating employment opportunities and long-term economic productivity.
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Unfortunately, many Nigerians believe that borrowed funds have not always been invested in productive sectors capable of improving the welfare of citizens. Instead, several projects financed through loans are either abandoned, poorly executed, or never completed despite billions allocated to them. In many instances, governments announce ambitious projects that eventually disappear without meaningful public accountability. Political analysts argue that weak monitoring systems, corruption, and policy inconsistency have prevented Nigeria from obtaining the full benefits of many externally financed projects.
The late African scholar, Claude Ake, consistently warned that development in Africa cannot succeed under systems characterised by elite domination, corruption, and weak democratic institutions. According to Ake, African political elites often prioritise personal and political interests above national development, thereby weakening state institutions and limiting economic progress. His analysis remains highly relevant in understanding Nigeria’s present debt crisis, where public borrowing continues to increase while poverty and inequality worsen.
Economic historian, Walter Rodney, also argued in How Europe Underdeveloped Africa that dependence on foreign financial structures can perpetuate underdevelopment if local economies fail to build independent productive capacities. Rodney believed that African countries must strengthen internal economic structures rather than rely excessively on external financial support. Nigeria’s growing dependence on foreign loans therefore raises important questions about national economic sovereignty and long-term sustainability.
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Another major concern is the increasing burden of debt servicing. A significant portion of Nigeria’s annual revenue is now spent on repaying loans and servicing interest obligations. This has reduced the amount of money available for critical sectors such as education, healthcare, agriculture, infrastructure, and social welfare programs. In practical terms, the government is spending enormous resources on debt repayment while millions of citizens continue to struggle with poor public services and rising living costs.
The economic consequences of this situation are visible across the country. Inflation has continued to erode purchasing power, making food and basic commodities increasingly unaffordable for ordinary Nigerians. Small businesses struggle under unstable economic conditions, while unemployment continues to rise among the youth population. In rural communities, insecurity and inadequate infrastructure continue to limit agricultural productivity and economic opportunities. Many young Nigerians are increasingly seeking opportunities abroad because they believe the domestic economy no longer offers sustainable prospects for survival and advancement.
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Nigerian political economist, Pat Utomi, has repeatedly argued that Nigeria’s economic crisis is fundamentally a crisis of leadership and institutional failure rather than a lack of resources. According to Utomi, Nigeria possesses sufficient natural wealth and human capital to achieve sustainable development, but corruption, policy inconsistency, and poor governance continue to undermine progress. This observation reinforces the argument that the problem is not necessarily the act of borrowing itself but the inability of institutions to ensure effective utilisation of borrowed resources.
Ultimately, Nigeria’s rising debt burden reflects broader questions about governance, accountability, leadership, and national priorities. The tragedy is not merely that the country borrowed billions of dollars, but that millions of citizens still remain trapped in poverty despite the promises of development repeatedly attached to these loans. Across the country, ordinary Nigerians continue to ask why a nation so rich in oil, gas, agriculture, and human resources remains unable to provide decent living conditions for its people.
The analysis of Daron Acemoglu and James A. Robinson in Why Nations Fail also provides valuable insight into Nigeria’s situation. They argue that nations prosper when they establish inclusive political and economic institutions that promote accountability, innovation, productivity, and broad participation. Conversely, extractive systems dominated by corruption and concentration of power often produce poverty and underdevelopment despite abundant natural resources. Nigeria’s debt crisis appears closely connected to this institutional challenge.
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Critics further warn that continuous borrowing without corresponding economic productivity may eventually trap Nigeria in a dangerous cycle of dependency and fiscal instability. Excessive dependence on foreign creditors may weaken national economic independence and expose domestic policies to external pressures. This concern has fuelled debates about whether Nigeria should focus more on strengthening internal revenue generation, industrialisation, agricultural productivity, and prudent resource management rather than depending heavily on foreign loans.
Nevertheless, many economists acknowledge that borrowing itself is not entirely negative. According to the economic theories of John Maynard Keynes, public borrowing can stimulate growth during periods of economic weakness when invested productively. However, Keynes also warned that excessive debt without productive returns can create long-term financial instability. The success of borrowing therefore depends largely on transparency, accountability, effective governance, and strategic investment in sectors capable of generating sustainable economic growth.
Ultimately, Nigeria’s rising debt burden reflects broader questions about governance, accountability, leadership, and national priorities. The tragedy is not merely that the country borrowed billions of dollars, but that millions of citizens still remain trapped in poverty despite the promises of development repeatedly attached to these loans. Across the country, ordinary Nigerians continue to ask why a nation so rich in oil, gas, agriculture, and human resources remains unable to provide decent living conditions for its people.
Until corruption is significantly reduced, institutions strengthened, and public resources managed responsibly, external borrowing may continue to deepen socio-economic hardship rather than solve it. The future of Nigeria’s development therefore depends not only on how much the country borrows but on whether its leaders possess the political will, integrity, and institutional capacity to transform borrowed resources into genuine progress for the benefit of all citizens rather than a privileged few.
Comrade Danlami popularly known as Baba Lawan writes from Haliru Umar Street, Dorayi Karamar Unguwar Yamma, Gwale LGA, Kano State, Nigeria. He can be reached via email: lawanmusa363@gmail.com
