The Centre for Anti-Corruption and Open Leadership, a civil society organization, has issued a cautionary statement regarding the rising debt profile of Nigeria. This warning comes in response to the Federal Government’s efforts to secure a new $1.5 billion loan from the World Bank.

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, made the announcement after the Federal Executive Council meeting presided over by Bola Tinubu at the Presidential Villa.

Edun stated that the Federal Government had approved an application for the $1.5 billion loan from the World Bank, in addition to an $80 million loan from the African Development Bank for the Ekiti Knowledge Zone Project in Ekiti State.

EKZ aims to empower young individuals by facilitating their involvement in the knowledge economy and technology sector, creating opportunities for training, employment, and participation in the growing technological landscape in the country.

Reacting to this development, CACOL Chairman, Debo Adeniran, expressed concerns about the increasing debt burden on the country and called on Bola Tinubu and his cabinet members to address the various challenges facing Nigeria.

Adeniran stated, “The decision of the federal government to continue borrowing amidst the rising debt burden already imposed on the country by past administrations and the seemingly unsustainable nature of the loans has made us break the silence on this serious issue.”

“We expect this administration to dare to be different from past administrations; we expect the president and his cabinet members to think out of the box in finding solutions to the myriad of problems confronting the nation.”

He emphasized that if the government must borrow, it should be for capital projects that would generate income or boost the country’s GDP, rather than for servicing recurrent expenditures.

Adeniran also highlighted the potential implications of these continuous borrowings on the economy, the value of the national currency, and the debt service burden, stressing the need for prudent financial management.

The CACOL chairman called on the President and his cabinet to reduce the cost of governance, explore alternative revenue sources, address challenges in the oil and gas sector, bring more wealthy individuals into the tax net, and develop various sectors like the blue economy and mining.

He warned that overreliance on borrowing to finance recurrent expenditures could lead to future economic challenges.
Nigeria’s public debt, which includes federal and state government debt, increased by N3.60 trillion in the first quarter of 2023, according to the Debt Management Office.

This figure excludes the N22.7 trillion loans provided by the Central Bank of Nigeria under its Ways and Means policy.