Tinubu’s Economic Adviser Dismisses Debt Fears, Says Borrowing is Strategic and Productive
The Presidency has dismissed growing fears that Nigeria’s debt profile is spiraling out of control, insisting instead that the country is under-borrowing compared to its needs and economic potential.
The Special Adviser to President Bola Tinubu on Economic Matters, Tope Fasua, stated this during an interview on Channels Television on Tuesday. He was reacting to widespread concerns over the nation’s rising debt burden, particularly external loans.
Debt Levels Within Safe Limits
According to Fasua, Nigeria’s debt-to-Gross Domestic Product (GDP) ratio currently stands at 39 percent, a figure he described as relatively low and an indicator that the country still has room to borrow responsibly.
“At 39 per cent of GDP, Nigeria is actually under-borrowing,” he said. “And of course, regarding debt servicing, the last data I got last month was 64 per cent lower. In 2022, there was a point when our debt service-to-revenue ratio was as high as 120 per cent. We used all our revenues to service debts, and we had to borrow 20 per cent extra just to service that same debt.”
He added that Nigeria’s debt management has improved significantly under President Tinubu’s administration. “Currently, our debt management is not so bad. I think we are doing a great job in the area of debt management, if you ask me,” he said.
States Paying Off Debts
Fasua further revealed that Nigeria’s subnational governments have also been able to reduce their liabilities. Between 2023 and 2024, states reportedly paid down 42 per cent of their debts.
“A country is run like a company. A company that is thriving—let’s call it a conglomerate—thinks about how to pay down debt. We service debts, we pay some, and we take new ones because we are growing and want to expand our horizon in the global market,” he explained. “That’s the productive part of borrowing.”
Loans Are for Development, Not Waste
The presidential aide stressed that new loans are not being used for frivolities or corruption but for developmental projects such as infrastructure.
He noted: “The government is only taking loans for developmental projects and not for wastage or embezzlement.”
Constructive Criticism Welcomed
Despite his defense of government borrowing, Fasua said the Tinubu administration is open to scrutiny and constructive criticism from Nigerians.
“In terms of priorities, interest rates, lenders, and debt management, criticism is welcome,” he said. “The key is ensuring that the money is actually going into what it is meant for. Are there cash flow projects that can be brought in to service the debts, even if we don’t have funds to pay everything?”
Rising External Debt
Nevertheless, official figures suggest that Nigeria’s debts are increasing. Data from the Debt Management Office (DMO) and the National Bureau of Statistics (NBS) shows that Nigeria’s external debt stock stood at approximately $45.97 billion (₦70.63 trillion) as of Q1 2025.
This represents a 26.07 percent year-on-year increase from Q1 2024, driven by new borrowings and the depreciation of the naira.
Infrastructure Gap and Poverty Reduction
Justifying continued borrowing, Fasua argued that Nigeria has a massive infrastructure deficit of about $3 trillion annually. He maintained that loans are essential to fill this gap and fund crucial national projects.
“Nigeria has a huge lacuna of infrastructural needs of about $3 trillion or more every year to fill. We have roads to build across the country. All of these are very important projects. And we still have a lot of maintenance work to do on a lot of infrastructure that we have built,” he explained.
Fasua further linked infrastructure development to poverty alleviation, emphasizing its role in reducing multidimensional poverty poverty that goes beyond income to include lack of access to infrastructure and basic services.
“One of the things I have been writing about is the centrality of infrastructure towards reducing multidimensional poverty. The only way you can address multi-dimensional poverty is to fund infrastructure,” he said.
According to him, through infrastructure investments, the government has already made progress in tackling poverty: “We have taken more people out of poverty probably about 120 million persons have been taken out of multidimensional poverty.”
