Former Anambra State Governor and presidential aspirant of the Nigeria Democratic Congress (NDC), Peter Obi, has expressed concern over Nigeria’s projected $11.6 billion debt servicing obligation for 2026, warning that the development raises serious questions about the Federal Government’s fiscal priorities.
Obi made the remarks on Monday in a statement posted on his official X account, where he cautioned that the country’s rising debt profile could further strain investments in critical sectors such as healthcare, education, and social welfare.
According to him, borrowing is not inherently harmful when undertaken prudently and directed toward productive investments capable of stimulating economic growth and improving living standards.
However, Obi argued that Nigeria’s current borrowing pattern tells a different story.
“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.
He further alleged that a significant portion of the debts currently being serviced was accumulated under President Bola Tinubu’s administration, while borrowing has continued at what he described as a rapid pace.
Obi listed recent external loan commitments by the Federal Government to include approximately $5 billion from First Abu Dhabi Bank in the United Arab Emirates, $1 billion through UK Export Finance via Citibank London, a proposed $1.25 billion facility from the World Bank, and an additional $516 million arranged through Deutsche Bank.
According to him, these commitments bring Nigeria’s latest known external borrowing to roughly $7.8 billion, excluding ongoing domestic borrowing through monthly bond issuances.
The former Labour Party presidential candidate also drew attention to allocations contained in the proposed 2026 budget, noting that the Federal Government earmarked about ₦2.46 trillion for healthcare, ₦2.56 trillion for education, and ₦865 billion for poverty alleviation — amounting to a combined total of approximately ₦5.885 trillion.
By contrast, he said the projected debt servicing figure, estimated at between ₦17 trillion and ₦18 trillion depending on exchange rates, is nearly three times higher than the combined allocation to the three sectors.
“This imbalance highlights a troubling fiscal reality in which debt obligations increasingly crowd out investment in human capital and poverty reduction,” Obi said.
He also expressed concern over the implementation of budgetary allocations, arguing that even the limited funds appropriated for key sectors may not be fully released or effectively utilised.
Drawing comparisons with countries such as Japan, the United Kingdom, the United States, the United Arab Emirates, Singapore, and Indonesia, Obi noted that although those nations also maintain high debt profiles, their borrowings are largely invested in infrastructure, healthcare, education, and innovation — sectors capable of generating long-term economic returns.
“As a result, despite high debt levels, their obligations remain more manageable because they are tied to measurable productivity,” he added.
Obi maintained that the real issue is not borrowing itself, but whether borrowed funds are translated into economic productivity, inclusive growth, and improved living conditions for citizens.
“Without this, debt servicing shifts from being a temporary fiscal obligation to a long-term structural burden that constrains development and deepens economic vulnerability,” he said.
His comments come days after President Bola Tinubu, speaking at the Africa Forward Summit in Nairobi, Kenya, disclosed that Nigeria is projected to spend approximately $11.6 billion on debt servicing in 2026.
Meanwhile, Obi and former Kano State Governor Rabiu Kwankwaso recently joined the Nigeria Democratic Congress (NDC) following their earlier alignment with a coalition under the African Democratic Congress (ADC). Both politicians cited internal party crises, external interference, and worsening political tensions as reasons for their political realignment.
