Former Anambra State governor and 2023 Labour Party presidential candidate, Peter Obi, has warned that President Bola Tinubu’s disclosure that Nigeria will spend about $11.6 billion on debt servicing should alarm anyone concerned about the country’s future.
In a statement posted on his X handle on Monday, Obi said the size of the planned debt repayment raises serious questions about Nigeria’s fiscal direction and development priorities.
“During his recent foreign tour, President Bola Ahmed Tinubu stated that Nigeria will spend about $11.6 billion on debt servicing, a figure that should concern anyone interested in the country’s economic future and long-term development,” Obi said.
He argued that borrowing is not a problem when loans are carefully managed and invested in sectors that grow the economy.
According to him, countries such as Japan, the United Kingdom, the United States, the United Arab Emirates, Singapore and Indonesia carry large debts but use borrowed funds to support education, healthcare, infrastructure and innovation.
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“These sectors generate long-term economic returns and sustain repayment capacity,” he said.
Obi, however, said Nigeria’s case is different because much of the country’s borrowing has been used for consumption, with little lasting development to show for it.
He further claimed that a large part of the debt now being serviced was accumulated under the Tinubu administration, while new borrowing has continued at a strong pace.
According to Obi, the government’s recent external borrowing includes about $5 billion from First Abu Dhabi Bank in the United Arab Emirates, $1 billion through UK Export Finance and Citibank London, $1.25 billion under consideration from the World Bank, and another $516 million arranged through Deutsche Bank.
He said these transactions bring Nigeria’s latest known external loan commitments to roughly $7.8 billion, aside from continued domestic borrowing through regular bond sales.
The former presidential candidate also raised concerns over what he described as an imbalance in government spending.
He said figures in the 2026 budget show that health received ₦2.46 trillion, education ₦2.56 trillion and poverty alleviation ₦865 billion, bringing total spending on the three sectors to about ₦5.89 trillion.
By comparison, he said the estimated ₦17 trillion to ₦18 trillion expected to be spent on debt servicing is almost three times higher than the combined allocation to health, education and social protection.
“This imbalance highlights a troubling fiscal reality in which debt obligations increasingly crowd out investment in human capital and poverty reduction,” Obi said.
He also warned that allocations to critical sectors may not be fully released, adding that part of the funds eventually released could be diverted or misused.
“Ultimately, the central issue is not borrowing itself, but whether borrowed funds are being converted into measurable productivity, inclusive growth, and improved living standards,” Obi said.
He warned that without productive use of loans, debt servicing could become “a long-term structural burden” that would slow development and deepen Nigeria’s economic vulnerability.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X