A former Governor of Anambra State, Peter Obi, has expressed concern over Nigeria’s plan to spend about $11.6 billion on debt servicing in 2026, warning that the growing debt burden could undermine investment in critical sectors and worsen economic vulnerability.
Obi, who questioned the government’s fiscal priorities and the sustainability of the country’s rising debt profile on his X account on Monday, was reacting to comments by President Bola Tinubu at the recent Africa Forward Summit in Nairobi, co-hosted by Emmanuel Macron and William Ruto, where the President disclosed that Nigeria could spend about $11.6 billion on debt servicing in 2026.
According to him, borrowing is not inherently bad if it is tied to productive investments and long-term economic growth. However, he argued that Nigeria’s borrowing pattern has largely financed consumption rather than development.
“A huge proportion of past borrowing has been directed toward consumption, with limited visible or sustainable developmental outcomes to justify the scale of indebtedness,” he said.
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Obi noted that a significant portion of the debt currently being serviced was accumulated under the administration of Bola Ahmed Tinubu, while borrowing has continued at a rapid pace.
He listed recent external borrowings to include about $5 billion from First Abu Dhabi Bank in the UAE, $1 billion from UK Export Finance through Citibank London, a proposed $1.25 billion World Bank facility, and another $516 million arranged through Deutsche Bank.
According to him, the latest external loan commitments amount to roughly $7.8 billion, aside from continued domestic borrowing through bond issuances.
Obi further argued that allocations to key sectors in the 2026 budget remain significantly lower than projected debt servicing obligations.
He said health was allocated ₦2.46 trillion, education ₦2.56 trillion, and poverty alleviation ₦865 billion — a combined total of about ₦5.89 trillion.
By comparison, he said the projected $11.6 billion debt servicing bill, estimated at between ₦17 trillion and ₦18 trillion depending on exchange rates, is nearly three times higher than the combined allocations to the three sectors.
“This imbalance highlights a troubling fiscal reality in which debt obligations increasingly crowd out investment in human capital and poverty reduction,” Obi stated.
He also warned that even the limited allocations to these sectors may not be fully released or effectively utilised.
Drawing comparisons with countries such as Japan, the United Kingdom, the United States, the United Arab Emirates, Singapore, and Indonesia, Obi said high debt levels become manageable when borrowings are channelled into productive sectors such as infrastructure, healthcare, education, and innovation.
“The central issue is not borrowing itself, but whether borrowed funds are being converted into measurable productivity, inclusive growth, and improved living standards,” he added.
