Former Labour Party presidential candidate, Peter Obi, has raised concerns over Nigeria’s rising debt profile, describing current borrowing practices as harmful to the nation’s long-term economic health.
In a statement shared on X (formerly Twitter), Obi argued that borrowing, when not tied to productive investments, can have devastating consequences. He wrote that “borrowing is not only a leprosy, but a killer cancer when it is borrowed for consumption and not production as it is in Nigeria today.”
Obi emphasized that debt should be used as a tool for economic growth, not consumption, warning that unproductive borrowing weakens national development. According to him, “borrowing for consumption slowly eats away at the health, reputation, and autonomy of a nation.”
He further noted that Nigeria’s problem is not just debt, but what he described as “debt without productivity.” He explained that such borrowing fails to deliver measurable economic value, stating that it does not translate into “jobs, growth, or improved living standards for the Nigerian people.”
Citing the Fiscal Responsibility Act 2007, Obi stressed that any borrowing by the government must be accompanied by a clear purpose and a cost-benefit analysis. He highlighted that the law requires authorities to demonstrate how loans will contribute to economic growth and improve citizens’ welfare.
Obi, however, alleged that many of the current borrowings do not meet these legal and economic standards. He said, “most of the borrowings by this government do not satisfy the requirements of law or the requirements of economic common sense.”
He also warned about the country’s growing debt servicing burden, noting that Nigeria’s high debt servicing ratio limits its ability to invest in critical sectors. According to him, the issue is less about the debt-to-GDP ratio and more about the strain of servicing existing debt.
Obi cautioned that poorly utilized loans could create what he described as a “double jeopardy,” where the government uses current revenue to service debts that neither boost revenue nor enhance productive capacity.
He concluded by calling for transparency and accountability in government borrowing, stating that “a responsible government does not merely defend borrowing; it explains it, justifies it, and most importantly, ensures it works for the people.”