Former Anambra State Governor and Labour Party presidential candidate, Peter Obi, has expressed deep concern over the Federal Government’s projection to spend approximately $11.6 billion on debt servicing in 2026, describing it as a troubling priority that should worry all Nigerians.
In a statement released on Monday via his official X account, Obi said that while borrowing is not inherently wrong when guided by prudence and directed toward productive investments, Nigeria’s approach has been markedly different.
“A huge proportion of past borrowing has been directed toward consumption, with limited visible or sustainable developmental outcomes to justify the scale of indebtedness,” he stated.
Obi noted that a significant portion of the debt currently being serviced was accumulated under the current Tinubu administration, even as borrowing continues at a rapid pace.
He highlighted recent external loans, including $5 billion from First Abu Dhabi Bank, $1 billion from UK Export Finance, $1.25 billion from the World Bank (under consideration), and $516 million from Deutsche Bank bringing fresh external commitments to roughly $7.8 billion.
Domestic borrowing through regular bond issuances is also adding to the debt stock.The former governor drew a stark comparison with the 2026 budget allocations: ₦2.46 trillion for health, ₦2.56 trillion for education, and ₦865 billion for poverty alleviation, totaling about ₦5.885 trillion for these three critical sectors.
By contrast, the projected $11.6 billion debt servicing (approximately ₦17–18 trillion) is nearly 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 added that even the limited funds allocated to these sectors often face poor release and possible misappropriation.
Obi contrasted Nigeria’s situation with heavily indebted but more productive economies such as Japan, the United Kingdom, the United States, the United Arab Emirates, Singapore, and Indonesia, where borrowings are largely invested in education, healthcare, infrastructure, and innovation sectors that generate long-term economic returns.
He stressed that the core issue is not borrowing itself, but whether borrowed funds are converted into measurable productivity, inclusive growth, and improved living standards for citizens.
Without this, he warned, debt servicing becomes a long-term structural burden that constrains development.Obi’s reaction follows President Bola Tinubu’s recent disclosure at the Africa Forward Summit in Nairobi, Kenya, where he revealed the $11.6 billion debt servicing projection for 2026.
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