Tinubu defends borrowing as debt takes 65% of revenue
By the AFREEQUE newsroom, based on Business Day Nigeria
Nigerian President Bola Tinubu is defending increased borrowing to finance roads, ports, railways and electricity, as debt servicing absorbs about 65% of public revenue. He puts debt at 35.75% of GDP in the second quarter of 2026 and is relying on these investments to create revenue and jobs, according to Business Day Nigeria.
Nigerian President Bola Tinubu is defending his government's reliance on borrowing to finance infrastructure, while debt servicing absorbs about 65% of public revenue. In an article he signed on Friday, he said public debt represented 35.75% of gross domestic product in the second quarter of 2026 and considered this level manageable compared with that of other economies, Business Day Nigeria reports.
Tinubu says he is directing new borrowing towards roads, ports, railways and electricity, in the hope of stimulating economic activity, revenue and employment. He acknowledges, however, that the burden of debt servicing requires greater fiscal discipline. The strategy is raising questions about whether the projects can generate enough revenue quickly enough to offset the cost of borrowing.
The president says real GDP grew by 4.43% in the second quarter of 2026 and by 4.2% in the first half, while headline inflation fell to 14.63% in September, from 20.98% a year earlier. Food inflation nevertheless remained at 19.59%.
Tinubu also says foreign reserves stood at $55.1 billion on 9 October, including about $46 billion in net reserves, an 18-year high. He attributes a fourfold increase in federation revenue since 2021 to the removal of the fuel subsidy, the unification of the exchange rate and tax modernisation. This defence of borrowing comes after the president requested new external loans on 27 October and a Nigerian union criticised $20.5 billion in external loans.
