The Peoples Democratic Party (PDP) has launched a scathing critique against President Bola Tinubu's administration, denouncing its recent request to secure an additional $21.5 million, ¥15 billion, and a €65 million grant from international financial institutions. The opposition party labels this move as both contradictory and a threat to Nigeria's economic stability, asserting that the government's inconsistent policies are exacerbating the suffering of many Nigerians amidst worsening economic conditions.
President Tinubu's latest borrowing request, transmitted to the National Assembly last Tuesday for legislative approval as part of the Medium-Term Expenditure Framework (MTEF) for the 2025–2026 fiscal period, has ignited widespread criticism. Economists and civic advocates, among others, question the necessity of external borrowing, particularly after the removal of fuel subsidies, a policy initially touted to free up resources for domestic development and reduce reliance on loans. Concerns are mounting over Nigeria's escalating debt profile and its potential long-term implications for future generations.
During a press conference on Wednesday, Debo Ologunagba, the PDP National Publicity Secretary, challenged the rationale behind both the fresh borrowing and the earlier fuel subsidy removal. He highlighted the government's previous assurance that subsidy removal would alleviate fiscal pressure and negate the need for further loans. Ologunagba expressed bewilderment, stating, "Only last week, the president had just asked for and requested for a $24.5 billion loan. What they said that is actually very annoying was that they’re going to use that money to cushion the effect of subsidy removal. We were here when they said to us, ‘we’re to going remove subsidies, therefore, we will not borrow anymore. We’re not going to put subsidy on petrol, and therefore, there’ll be more money to provide cushioning policies and programmes, to take away the pain of the subsidy.” So the question is – where is the money if indeed you’re going to borrow money to cushion the effect of subsidy, two years after?” He lamented that the government's policy inconsistencies have led to tragic consequences for many Nigerians. Ologunagba also questioned the allocation of funds for pensioners, noting that pension schemes are contributory.
The PDP spokesperson extended his criticism to the National Assembly, accusing it of dereliction of its oversight duties and blindly endorsing the president's decisions. He clarified that the opposition's criticism is not for political gain but stems from a genuine desire for improved governance, emphasizing that a thriving Nigeria benefits all its citizens.
Nigeria's debt profile, as reported by the Debt Management Office (DMO), stood at N144.7 trillion (approximately $94.2 billion) as of 31 December 2024. A significant portion, N74.4 trillion (51.4 percent), is domestic debt, while N70.3 trillion (48.6 percent) constitutes external debt. This escalating debt has led to a surge in debt servicing costs, which jumped from N3.52 trillion in 2022 to N7.8 trillion in 2023, a 121 percent increase, and further to N13.12 trillion in 2024, representing a 68 percent increase from the previous year. Such high debt servicing costs inevitably divert funds from crucial sectors like infrastructure and social services, potentially impeding economic growth and development.
In defense of the borrowing plan, the Federal Ministry of Finance, through its Director of Information and Public Relations, Mohammed Manga, stated last Wednesday that the loans are part of a strategic and structured approach aligned with Nigeria’s economic priorities. Manga explained that these funds are earmarked for the 2025–2026 fiscal period within the Medium-Term Expenditure Framework (MTEF), a planning and budgeting tool for managing government finances over a typical three-year period.
He specified that the funds would be sourced from reputable development partners, including the World Bank, African Development Bank, French Development Agency, European Investment Bank, Japan International Cooperation Agency (JICA), China EximBank, and the Islamic Development Bank. Manga detailed that the funds are intended to support various government initiatives, including the expansion and upgrade of power grids and transmission lines, development of irrigation systems for food security, installation of a nationwide fiber optics network, procurement of fighter jets for national security, and enhancement of rail and road infrastructure across geopolitical zones. He noted that these projects would span multiple states, such as Abia, Bauchi, Borno, Gombe, Kaduna, Lagos, Niger, Oyo, Sokoto, and Yobe, reflecting a comprehensive national development agenda.
