Peter Obi Accuses Tinubu Of ‘borrowing Nigeria Into Economic Slavery’ Over Rising Debt Servicing

 

According to Obi, the amount earmarked for debt repayment far outweighs government allocations to critical sectors such as healthcare, education, and poverty alleviation.

Former Labour Party presidential candidate, Peter Obi, has criticized the administration of President Bola Ahmed Tinubu over Nigeria’s worsening debt crisis and what he described as misplaced fiscal priorities.

The former governor of Anambra State said that President Tinubu is “borrowing Nigeria into economic slavery”, warning that the country risks long-term economic stagnation if the trend continues.

In a statement posted on X on Monday titled “Debt Servicing, Borrowing, and Nigeria’s Fiscal Priorities,” Obi expressed concern over Tinubu’s disclosure during his recent foreign trip that Nigeria would spend about $11.6 billion on debt servicing.

According to Obi, the amount earmarked for debt repayment far outweighs government allocations to critical sectors such as healthcare, education, and poverty alleviation.

Tinubu had sounded the alarm over the growing strain of debt servicing on Nigeria’s economy, warning that billions of dollars earmarked for loan repayments are depriving critical sectors of the investment needed to drive industrialization, create jobs, and stimulate long-term economic growth.

Speaking at the Africa Forward Summit in Nairobi, Kenya, President Tinubu disclosed that Nigeria is projected to spend $11.6 billion on debt servicing in 2026, with nearly half of the nation’s expected revenue expected to go into repayment obligations under the current global financial system.

In March 2026, SaharaReporters reported that Nigeria paid a total of $848.7 million in debt servicing to two World Bank institutions in 2025, while its outstanding debt to the agencies rose to $19.8 billion by the end of the year, according to data reviewed from the Debt Management Office (DMO).

A SaharaReporters review of the DMO data showed that the payments were made to two arms of the World Bank Group: the International Development Association and the International Bank for Reconstruction and Development.

According to the analyzed figures, the World Bank’s “International Development Association” received $769.2 million from Nigeria as debt service payments in 2025.

The “International Bank for Reconstruction and Development”, which is under the ‘World Bank group’, received $79.5 million within the same period.

Combined, the two agencies received $848.7 million in debt servicing payments from Nigeria during the 2025 fiscal year.

However, despite these repayments, Nigeria’s outstanding debt obligations remain substantial.

The data reviewed showed that Nigeria owes the ‘International Development Association’ $18.506 billion, while the “International Bank for Reconstruction and Development” is owed $1.384 billion as of the end of 2025.

This brings Nigeria’s total debt exposure to the two World Bank arms to approximately $19.8 billion.

The figures highlight a widening fiscal burden, even as the country continues to rely on external borrowing to fund key development priorities.

Obi said, “There is nothing inherently wrong with borrowing when it is guided by prudence and directed toward productive investment.

“Countries such as Japan, the United Kingdom, the United States, the United Arab Emirates, Singapore, and Indonesia are all heavily indebted, yet their borrowings are largely channelled into education, healthcare, infrastructure, and innovation – sectors that generate long-term economic returns and sustain repayment capacity.

“As a result, despite high debt levels, their obligations remain more manageable because they are tied to measurable productivity.”

Obi, however, argued that Nigeria’s situation under the current administration differs sharply because most borrowed funds allegedly fail to translate into visible development.

“Nigeria’s situation, however, is markedly different. 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 stated.

He further alleged that a significant part of the debt burden currently weighing on the country was accumulated under Tinubu’s administration.

“It is also important to note that a huge portion of the debt currently being serviced was accumulated under the Tinubu administration itself, while borrowing has continued at a significant pace,” he said.

“The administration’s recent external borrowing alone includes about $6 billion (from First Abu Dhabi Bank in the UAE—$5 billion, and UK Export Finance via Citibank London—$1 billion), a further $1.25 billion under consideration from the World Bank, and an additional $516 million arranged through Deutsche Bank, bringing the latest known external loan commitments to roughly $7.8 billion.

“In addition, domestic borrowing through monthly bond issuances continues to add to the overall debt stock,” Obi added.

He compared the country’s debt servicing obligations with allocations to social sectors in the proposed 2026 budget, describing the disparity as alarming.

“Against this backdrop, Nigeria’s 2026 budget shows that health is ₦2.46 trillion, education is ₦2.56 trillion, and poverty alleviation is ₦865 billion, giving a combined total of about ₦5.885 trillion for these three critical sectors,” he stated.

“By comparison, debt servicing at about $11.6 billion (approximately ₦17–₦18 trillion, depending on exchange rate assumptions) is almost three times higher than the total allocation to health, education, and social protection combined.

“This imbalance highlights a troubling fiscal reality in which debt obligations increasingly crowd out investment in human capital and poverty reduction.

“Moreover, even within the limited allocations to these sectors, funds may not be fully released, and a significant portion of what is eventually released could be misappropriated.”

Obi maintained that borrowing itself was not the core problem, insisting instead that the major concern was the absence of measurable economic productivity and improved living standards tied to the loans.

“Ultimately, the central issue is not borrowing itself, but whether borrowed funds are being converted into measurable productivity, inclusive growth, and improved living standards,” he said.

“Without this, debt servicing shifts from being a temporary fiscal obligation to a long-term structural burden that constrains development and deepens economic vulnerability.”

SOURCE: SAHARA REPORTERS