Taiwo Oyedele, minister of finance and coordinating minister of the economy, says the sharp increase in Nigeria’s public debt is largely the result of naira depreciation and accounting adjustments rather than fresh borrowing by the Bola Tinubu administration.
Oyedele spoke on Monday while briefing the senate committee
on finance on the state of the nation’s economy.
The minister was responding to questions from Adamu Aliero,
senator representing Kebbi central, on claims that the current administration
had borrowed about N80 trillion in addition to the N75 trillion public debt it
inherited.
Oyedele said comparing the country’s debt stock at the start
of the administration with the current figure without accounting for exchange
rate movements created a misleading impression.
“When this administration came into office, public debt was
around N75 trillion. Many people simply compare that figure with today’s debt
stock and conclude that this government has borrowed massively,” he said.
“However, it is important to note that, following the
reforms and the depreciation of the naira, the foreign currency component of
our public debt had to be revalued because Nigeria reports its debt in naira.
“That accounting adjustment alone added more than N40
trillion to the public debt figure.”
The minister said the securitisation of the ways and means
advances inherited from the previous administration also contributed
significantly to the increase in the debt stock.
“Another important factor is the securitisation of the ways
and means advances from the previous administration, which the national
assembly approved,” he said.
“About N33 trillion was added to the public debt through
that process. It was not new borrowing; it was simply bringing previously
existing obligations onto the official debt books.
“These factors have not always been properly explained,
which is why the reported public debt appears much larger.
“The actual amount this administration has borrowed is
nowhere near what many people believe.”
Oyedele added that much of the government’s domestic
borrowing was used to refinance existing debt rather than accumulate new
obligations.
“Even for domestic borrowing, much of it is refinancing.
Debt that was borrowed previously matures, and government raises new debt to
refinance it. That is not new borrowing,” he said.
He said the Tinubu administration had adopted a prudent
borrowing strategy focused on infrastructure and long-term economic growth.
“This administration has been very responsible in its
borrowing. We understand the concerns of Nigerians and of the distinguished
senators, but we remain fully committed to debt sustainability,” he said.
“We see debt as leverage. Every naira and every dollar
borrowed should generate more value than the amount borrowed.”
During the session, Tahir Monguno, the senate chief whip and
senator representing Borno north, and Aliero criticised the slow implementation
of the capital component of the 2026 budget.
Monguno said failure to implement the capital budget
amounted to an impeachable offence.
However, Sani Musa, chairman of the senate committee on
finance, assured lawmakers that implementation of the capital component of the
budget would soon gather pace.
Speaking after a closed-door meeting with the minister and
members of the economic team, Musa said the committee and the executive are
working to improve budget implementation.
“Performance and priority-based budgeting system is being
looked at to replace the envelope system and also reverting back to old system
of payments for contractors,” he added.
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