The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, stated that Nigeria’s rising public debt is mainly due to the naira losing value and some accounting changes, not just new borrowing.
Mr Oyedele made this statement on Monday while talking to the Senate Committee on Finance about the economy. This came after lawmakers raised concerns about the country's growing debt.
His comments followed questions from Senator Adamu Aliero from Kebbi Central. Senator Aliero mentioned claims that President Bola Tinubu's administration borrowed around ₦80 trillion on top of the ₦75 trillion public debt it inherited.
The minister urged caution in comparing the country’s debt at the start of this administration to today’s figures. He emphasized that the naira's depreciation affects the debt numbers significantly.
“When this administration came into office, public debt was around ₦75 trillion. Many people simply compare that figure with today’s debt stock and conclude that this government has borrowed massively,” Mr Oyedele said.
He explained that Nigeria lists its public debt in naira. Because the naira has lost value, the naira amount of the country’s external debt has gone up a lot. He shared that the exchange-rate changes alone added over ₦40 trillion to the public debt.
Mr Oyedele also mentioned another key factor was the securitization of the Ways and Means advances from the previous government, which the National Assembly approved. This move brought ₦33 trillion in existing debts onto the government's official debt records.
“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,” he explained.
He added that much of the government’s local borrowing has been for refinancing old debts, not for new ones. He clarified that refinancing means replacing old debt with new debt to meet repayment needs and is not the same as taking on new debt.
Mr Oyedele assured that the Tinubu administration uses a careful borrowing approach. This strategy focuses on financing infrastructure and supporting long-term economic growth while keeping debt levels manageable.
“We see debt as leverage. Every naira and every dollar borrowed should generate more value than the amount borrowed,” Mr Oyedele emphasized.
Besides the debt discussion, senators also raised issues about the slow rollout of capital projects from the 2026 Appropriation Act. Senate Chief Whip Tahir Monguno from Borno North and Senator Aliero criticized the slow progress on these projects and called for faster implementation.
After a closed meeting with the minister and the economic management team, Sani Musa, the Chairman of the Senate Committee on Finance, reassured lawmakers that project implementation would improve. He stated that both the executive and the National Assembly are working to enhance budget performance.
Mr Musa said the government is looking into changing to a performance-based budgeting system. This will come with reforms to improve how contractors get paid, which will help in delivering projects on time.
Nigeria’s public debt has grown rapidly in recent years due to fiscal deficits, changes in exchange rates, and the formal acknowledgment of past government debts. After the foreign exchange market opened up in 2023, the naira dropped sharply against major currencies, raising the naira value of Nigeria’s foreign debt even without new foreign loans.
The Federal Government has consistently said its borrowing strategy aims to finance key infrastructure, back economic reforms, boost revenue, and keep debt sustainable. This issue continues to be closely watched as lawmakers and economic analysts keep an eye on the country’s fiscal situation, debt repayment costs, and budget execution.
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