NEWS
Is Nigeria Borrowing to Survive or to Build?
By Blaise Udunze
Nigeria is no longer flirting with deficit financing. As a country, it is living with it, not occasionally but structurally, routinely, almost comfortably. It became evident when the National Assembly rose to defend the proposed N25.
91 trillion deficit in the N58.47 trillion 2026 budget that it did more than justify another year of borrowing. It normalised it. Again, the message had been clearly defined that deficit financing is no longer a temporary response to shocks; it is now a structural feature of Nigeria’s fiscal architecture.This was confirmed by the Senate, which, led by Senator Solomon Adeola, who defended continued borrowing as inevitable.
In agreement with his defence, Senator Olamilekan Adeola argued that borrowing is inevitable in the face of unpredictable revenue and vast development needs. He is not wrong. No modern economy runs without deficits. The United States borrows. European economies borrow. Even fast-growing Asian Economies have used deficits strategically.The real issue, as Adeola himself admitted, is how Nigeria borrows and what it borrows for.
That is where the debate becomes uncomfortable. Looking at it objectively, in a plain calculation, almost half of what the federal government hopes to earn will go straight to creditors. The chronic issue is that Nigeria’s projected revenue for 2026 stands at N33.19 trillion, while expenditure is estimated at N58.47 trillion, leaving a yawning gap of over N25 trillion. Debt service alone is expected to gulp nearly N15.9 trillion. In other words, before roads are built, before hospitals are equipped, before schools are renovated, almost half of the projected revenue is already committed to servicing yesterday’s loans.
Of paramount concern is that the action being discussed does not serve as a policy that supports the economy; it is a counter-cyclical stimulus during downtime to stabilise growth. It is a structural dependence. This is to say that at the core of Nigeria’s deficit dilemma lies revenue weakness. Despite the much-touted diversification of the economy, the country remains heavily dependent on crude oil for foreign exchange and for a significant share of public revenue. The fearful part is that when oil prices fall, when production drops due to theft or quotas, or when global demand weakens, government revenue collapses. Expenditure, however, does not fall with oil prices. Salaries must be paid. Pensions must be honoured. Political offices must function. Debt must be serviced. Borrowing fills the gap.
Beyond oil, the non-oil tax base remains shallow. Nigeria’s tax-to-GDP ratio lags far behind peer economies. One of the challenges is that, as a vast informal sector, weak tax administration, compliance gaps, waivers, and leakages mean that even in years of non-oil growth, revenue does not rise proportionately. One truth the country must yield to is the advice of Minister of Finance, Wale Edun, who rightly warned that Nigeria must reduce its dependence on debt and build a stronger domestic revenue base. This stems from his understanding that in a world of high global interest rates and retreating multilateral support, borrowing is becoming more expensive and less forgiving. Yet the borrowing continues.
One troubling fact from the disclosure of the Debt Management Office, is not that Nigeria’s public debt stood at over N152 trillion by mid-2025 but it is projected to climb further. What makes this figure more of a trouble is not just its size, but its purpose. Historically, Nigeria once escaped the weight of unsustainable debt through the Paris Club exit negotiated under President Olusegun Obasanjo. Two decades later, the country finds itself in a far more complex web of domestic and external obligations. The question is simple in the sense of what has the borrowing built?
If deficits finance productive infrastructure that expands the economy’s capacity, power plants that reduce production costs, rail lines that ease logistics, digital infrastructure that boosts exports, then borrowing can be justified. Future growth will expand the tax base and service the debt. Hence, it will be agreed that deficits, in that scenario, become bridges to prosperity.
But if deficits finance recurrent expenditure, salaries, overheads, fuel subsidies, political patronage, interest payments, then borrowing becomes a treadmill. The country runs harder each year, yet moves nowhere.
Nigeria’s fiscal pattern increasingly resembles the latter. Recurrent expenditure consumes a significant portion of revenue. In some years, debt service has exceeded the federal government’s retained revenue. This forces further borrowing simply to keep government machinery running. Borrowing to service old debt is the classic signature of a fiscal trap.
Meanwhile, the crowding-out effect is becoming pronounced. With the government aggressively issuing domestic debt instruments, over 70 percent of risk assets in the financial system are reportedly tied to government securities. Banks prefer lending to the government at high yields rather than financing private businesses. Lending rates, influenced by a high monetary policy rate, hover between 35 and 40 percent. For manufacturers, farmers, and tech entrepreneurs, such rates are prohibitive.
In effect, the state is absorbing liquidity that could otherwise power private-sector growth. The engine of sustainable revenue, the productive economy, is being starved.
Supporters of the current approach argue that deficits are necessary to close Nigeria’s massive infrastructure gap. Contrary to their argument, the roads are dilapidated. Power supply remains unreliable. Security spending has ballooned in response to persistent threats. With a fast-growing population, social spending pressures are immense. In such a context, refusing to borrow would mean freezing development.
That argument carries weight. Nigeria cannot austerity its way to prosperity. While slashing expenditure indiscriminately could worsen unemployment and deepen poverty.
However, borrowing without institutional reform is a lot more dangerous. Economist Adi Bongo has warned that asset sales, privatisations, and new borrowing will fail without strong oversight and accountability. Nigeria’s history of public-private partnerships and sectoral reforms, particularly in the power sector, offers cautionary tales. Assets sold to politically connected entities without capacity did not deliver efficiency gains. Institutions were created but not empowered. Data was published but not interrogated. Borrowing into weak institutions is like pouring water into a leaking basket.
There is also the issue of political budgeting. Election cycles often bring expanded spending and proliferating projects. Revenue does not necessarily rise in tandem. Structural deficits become politically convenient. Once normalised, they are difficult to reverse.
The Senate President, Godswill Akpabio, who recently framed the 2026 budget as a “moral document,” said it must therefore be judged not by its size, but by its outcomes. The question that should follow such a comment is, will the N26 trillion capital allocation translate into completed roads, functional health centres, and reliable electricity? Or will delayed releases, procurement bottlenecks, and weak oversight roll projects into yet another fiscal year?
Nigeria’s history of overlapping budgets and low capital implementation rates raises legitimate skepticism. Economists have cautioned that attempting to execute multiple large budgets concurrently strains administrative capacity and encourages rushed, low-value spending. When execution falters, the borrowed funds do not generate returns. Yet the interest meter keeps running.
Subsidy reform illustrates both the promise and the risk. The removal of fuel subsidy under President Bola Tinubu was described as a turning point, which was commended by an international organisation. In theory, eliminating subsidies should free fiscal space for productive investment like infrastructure, health, or education, as expected. But transparency in how those savings are redeployed remains crucial, especially in how the subsidy removal is being used. The truth remains that trust erodes if citizens do not see tangible improvements in infrastructure and services to showcase how the money realized from subsidies is being expended. Compliance weakens because once trust and fairness decline, people will easily default or be less willing to obey rules (like paying taxes or following regulations). Revenue mobilisation becomes harder. Trust is the invisible currency of fiscal reform.
Exchange rate pressures add another layer of complexity. When the naira weakens, external debt servicing costs rise in local currency terms. Import-related spending increases. Even if reserves appear strong, they are not freely spendable funds; they are buffers against external shocks. Mistaking reserves for budgetary liquidity is a dangerous illusion.
The global context is also less forgiving. Developing countries now pay far more in debt service than they receive in aid. Capital flows are volatile. In such an environment, fiscal discipline is not optional; it is survival.
So, are Nigeria’s deficits building future revenue capacity or merely financing present consumption?
The evidence is mixed, but the tilt is worrying. There are genuine reform efforts underway, such as tax administration overhaul, digitised revenue monitoring, electricity sector reforms, and efforts to attract capital importation. There are signs of macroeconomic stabilization that are moderating inflation, improving reserves, and modest GDP growth. These are not trivial.
Yet the scale and persistence of deficits, the heavy burden of debt service, the crowding-out of private credit, and the lack of transparency around execution suggest that borrowing is increasingly funding continuity rather than transformation or driving meaningful structural change.
Deficit financing becomes a growth strategy only when three conditions are met, such as when borrowed funds are channeled into productivity-enhancing investments (such as infrastructure, energy, manufacturing, education, and these things must expand the economy’s capacity to produce); institutions ensure transparency and value for money; and economic growth outpaces debt accumulation, so the country can comfortably service and repay what it has borrowed. When those conditions weaken, deficits mutate into a fiscal trap.
Nigeria stands at that junction. The Senate is right that borrowing in itself is not evil. But normalising structural deficits without tightening or simultaneously enforcing expenditure discipline, expanding revenue beyond oil, strengthening institutions, and reducing the cost of governance, then the country is taking a significant risk.
A nation can borrow to build bridges. Or it can borrow to pay salaries. The former compounds growth. The latter compounds debt.
If Nigeria’s deficits do not translate into visible infrastructure, expanded industrial capacity, thriving private enterprise, and rising tax revenues, history will record this era not as bold reform, but as deferred reckoning.
Deficits are not destiny. But when they become routine, they stop being temporary tools, unexamined, and politically convenient; they shape the destinies of Nigerians. From today, as a sovereign nation, Nigeria must decide whether it is borrowing to survive the present or to secure the future. The choice Nigeria makes about how it uses deficit financing will determine whether it becomes a growth ladder or locks it into a worsening cycle of debt that becomes harder and more expensive to escape over time, while it grows costlier each year.
Blaise, a journalist and PR professional, writes from Lagos and can be reached via: blaise.udunze@gmail.com
The Benue State Security Trust Fund Bill, 2026, passes second reading on Thursday at the Benue State House of Assembly.
Leading the debate, Thomas Dugeri, the Majority Leader, emphasised that the bill sought to create a pool of resources to support the acquisition of security equipment and the deployment of both human and material resources necessary for all security agencies operating in the state.
Dugeri said that part of the fund would be earmarked for the training and retraining of security personnel, ensuring that they were equipped to meet the evolving security challenges facing Benue.
“Our people are confronted with insecurity from multiple fronts.
“Security is everybody’s business, and it is imperative that we invest in the sector proactively to prepare for the rainy day,” he said.
He urged his colleagues to support the bill to pass second reading and subsequent passage.
Samuel Agada (APC/Ogbadibo) described the bill as apt, timely, and necessary.
Also, Cephas Dyako (APC/Konshisha), highlighted that members of the public would also be encouraged to contribute financially to the fund.
Anthony Agom (APC/Okpokwu), said that the initiative would help the government address persistent security gaps and fulfill its responsibilities more effectively.
Emmanuel Onah (PDP/Oju I), cited the example of Zamfara, where the governor purchased and distributed security vehicles to law enforcement agencies to combat insecurity.
He noted that Benue currently faced significant security challenges and pledged that his constituents were ready to contribute to the proposed fund.
After the debate, the Speaker, Alfred Emberga, called on the Clerk, Dr Bem Mela, to read the bill for the second time.
Emberga further referred the bill to the Committee on Local Government, Security and Chieftaincy Affairs to conduct a public hearing.
He said that after the public hearing, the bill was expected to receive accelerated passage.
Senegal’s parliament has approved a new law doubling to 10 years the maximum prison term for sexual acts by same-sex couples and criminalising the “Promotion” of homosexuality.
A total of 135 MPs voted in favour, zero against and three abstained.
The next step will be for the president to sign it, then it will become law.The legislation, which was a campaign promise of President Bassirou Diomaye Faye and Prime Minister Ousmane Sonko, was sent to parliament after a wave of arrests over alleged same-sex relationships, already banned under Senegalese law.
The government spokesman dismissed international criticism of the bill, arguing that the move reflected the views of Senegalese people.
“The majority of Senegalese do not accept homosexuality. Our culture rejects it and we are firmly opposed to it,” said Amadou Moustapha Ndieck Sarré.
Some conservative activists in Senegal have long demanded harsher penalties.
The movement And Sàmm Jikko Yi, which campaigns to defend what it calls Senegalese moral values, has repeatedly urged authorities to adopt stricter legislation criminalising homosexual acts. Its leaders argue the law is necessary to protect Senegalese cultural and religious norms.
However, rights groups warn the move could worsen discrimination and violence against sexual minorities. Human Rights Watch researcher Larissa Kojoué said the proposed changes were worrying.
“Criminalising same-sex conduct and arresting people for their sexual orientation violates multiple internationally protected rights, including equality and non-discrimination.”
She added that such measures risked exposing people who were already stigmatised to “violence and fear.”
Alioune Tine, founder of the think-tank Afrikajom Center, said that the current climate could worsen social tensions. “If it is true that social concerns must be addressed, [the law] also has to respect human rights and protect public-health policies.”
Others have pointed out that same-sex relationships are a part of life and cannot be abolished by a law.
“Most of the same-sex relationships were hidden anyway. There are even people who are married in the society and who are still entertaining a safe-sex relationship because of the norm and the cultural norm in that society,” Senegal LGBTQ Association head and medical doctor Charles Dotou said.
All that will happen is “people will be hiding more, it will create more fear and people will be scared to live normally in that community. So there will be an exodus of people, particularly people who were already exposed so that that creates a bit of chaos in society,” Dr Dotou added.
The toughening of Senegal’s law follows a wave of arrests last month over alleged same-sex relationships. Police detained 12 men – among them two public figures and a prominent journalist.
Some supporters of the tougher legislation say they have concerns about HIV transmission, although it has long been scientifically established that people of any sexuality can contract and spread the illness.
Experts warn that further criminalising same-sex relations could vilify gay people living with HIV to the point that they shy away from receiving the vital medical care they need.
Senegal has been praised for its efforts to control HIV. Between 42,000 and 44,000 people are living with the virus in the country, with a national prevalence of about 0.3% among adults, one of the lowest rates in West Africa, according to the health ministry.
At the Fann University Hospital in Dakar, the executive secretary of the National Council for the Fight Against Aids (CNLS) – the body that has coordinated the country’s HIV response for decades – is worried about the situation with LGBTQ+ people.
“We have managed to control the HIV epidemic and we are moving towards eliminating Aids as a public health problem in Senegal,” Dr Safiétou Thiam said. “But what is happening now risks undermining the results of 30 to 35 years of efforts in the fight against the disease.”
Ousmane Sonko, the longtime firebrand opposition leader appointed prime minister in 2024, had told lawmakers the bill would punish what it describes as “acts against nature” with fines of up to 10,000,000 CFA francs ($17,600; £13,000) and prison sentences ranging from five to 10 years, compared with the current one- to five-year terms in the Muslim-majority country.
Several other African countries have also introduced tough new laws against the LGBTQ+ community in recent years.
In September last year, Burkina Faso’s transitional parliament approved a bill banning homosexual acts, following its neighbour Mali in 2024.
In 2023, Uganda voted in some of the world’s harshest anti-homosexual legislation meaning that people engaging in same-sex relationships can be sentenced to death in certain circumstances.
Ghana is also planning to re-introduce an anti-homosexual bill that activists say threatens basic human rights, safety and freedom.
By David Torough, Abuja
Nigeria’s public health sector is confronting a dual challenge as authorities warn of a potential meningitis outbreak in several northern states while experts raise concerns over the rising burden of non-communicable diseases linked to unhealthy lifestyles.
The Nigeria Meteorological Agency (NiMet) has issued a public health alert cautioning residents of northern Nigeria about the heightened risk of Cerebrospinal Meningitis, a potentially life-threatening infection affecting the brain and spinal cord.
In a statement on its official X account on Thursday, the agency urged vigilance and prompt medical action to curb the spread of the disease, which is commonly caused by the bacterium Neisseria meningitidis and spreads through respiratory droplets, particularly in crowded or poorly ventilated environments.
NiMet listed Sokoto, Zamfara, Kebbi, Katsina, Kano, Jigawa, Adamawa, Gombe, Bauchi, Yobe and Borno as states facing the highest risk, while residents in central states were advised to maintain moderate vigilance.
Plateau, Oyo, Cross River, Edo, Ekiti and Enugu were categorised as low vigilance areas.
The agency warned that the disease can progress rapidly and may become fatal within hours if untreated, stressing that early diagnosis and prompt antibiotic treatment significantly improve survival chances.
NiMet identified children and young adults, people living in overcrowded environments, individuals exposed to dry and dusty conditions, and those with weakened immune systems as the most vulnerable groups.
It urged residents to watch for symptoms including sudden high fever, severe headache, neck stiffness, nausea, vomiting and sensitivity to light, and to seek immediate medical attention if they occur.
The agency also advised preventive measures such as vaccination, improved hygiene, avoiding overcrowded spaces and ensuring proper ventilation in homes, schools and public places.
“Early awareness, vaccination and prompt treatment save lives,” NiMet said, urging communities to participate in health awareness campaigns.
Meanwhile, health experts have warned that Nigeria is also facing a “silent epidemic” of non-communicable diseases driven largely by poor diets, sedentary lifestyles and changing consumption patterns.
Country Director of the Network for Health Equity and Development (NHED), Dr Emmanuel Sokpo, said conditions such as heart disease, stroke, diabetes and hypertension were increasingly affecting Nigerians across age groups.
At a meeting with Health Editors on cardiovascular health and healthy food environment priorities in Abuja, Sokpo said excessive salt consumption, high sugar intake and limited public awareness about nutrition were major contributors to the growing health burden.
He noted that many Nigerians now rely more on meals purchased outside their homes, often high in salt, sugar and unhealthy fats, rather than preparing healthy meals.
Sokpo stressed that improving food environments and ensuring clearer nutrition information for consumers would support healthier choices and better health outcomes nationwide.
He said collaboration with journalists was critical in promoting accurate public information and countering misleading advertisements that promote unhealthy food products without highlighting long-term health risks.
According to him, rising illness linked to poor diets could ultimately affect economic growth if large numbers of citizens become too sick to remain productive.
Technical Director of NHED, Dr Jerome Mafeni, also warned that many deaths among relatively young adults were increasingly linked to hypertension, heart disease and diabetes.
He explained that unlike infectious diseases, non-communicable diseases do not spread from person to person but are largely influenced by lifestyle choices, dietary habits and environmental factors.
Mafeni identified excessive salt intake—often from seasoning cubes, processed foods and added table salt—as a major contributor to hypertension in Nigeria.
He also raised concerns about high sugar consumption from beverages and processed foods, which he said was contributing to rising cases of obesity and diabetes.
In addition, Mafeni warned about the health risks associated with saturated fats and industrially produced trans fats commonly found in fried foods, processed meals and cooking oils repeatedly used in fast-food outlets.
He said repeated heating of cooking oil increases harmful trans fats in food, raising the risk of cardiovascular diseases and certain cancers among regular consumers.
Mafeni called for stronger public awareness campaigns, supportive policies and improved food labelling systems to help consumers identify products high in salt, sugar and unhealthy fats.
He added that NHED was working with the Federal Ministry of Health and Social Welfare and regulatory agencies to promote clearer front-of-pack nutrition labelling to guide healthier consumer choices.
NHED is a not-for-profit organisation that advocates policies and interventions aimed at reducing illness and preventable deaths associated with poor health in Nigeria.
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