By Taiwo Scholarstica
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has defended government borrowing, arguing that public debates on debt often miss the most important question: what the borrowed funds are being used for and whether they generate economic value.
Speaking on Tuesday in Abuja during the Fellowship Award Ceremony and Second Biennial Conference of the Capital Market Academics of Nigeria, Oyedele said many analysts and commentators focus too much on the size of government debt while ignoring its purpose, cost, and expected returns.
According to him, borrowing should not automatically be viewed as a sign of economic mismanagement. Instead, he said governments, businesses, and individuals should be judged by how effectively borrowed funds are invested.
Oyedele explained that a country that borrows to finance productive projects capable of generating returns higher than the cost of the debt is making a rational economic decision. He warned that constantly criticizing borrowing without examining its impact could discourage investments needed for growth and development.
Delivering a lecture titled “Rethinking Capital Mobilisation for National Development: Why Should Capital Choose Nigeria,” the minister noted that many Nigerians see debt as a moral burden rather than a financial tool. He attributed this mindset to the country’s history of debt challenges but stressed that past experiences should not prevent modern economic thinking.
He observed that many people pray never to be in debt and often accuse governments that borrow of mortgaging the future. However, he argued that refusing to borrow when opportunities for growth exist can be just as damaging, describing such attitudes as a form of economic conservatism that limits development.
The minister also criticized the tendency of many Nigerian entrepreneurs to insist on full ownership of small businesses instead of embracing partnerships and equity investments that could help them expand. According to him, owning a significant share of a large and successful enterprise is often more valuable than owning all of a struggling small business.
Oyedele said Nigeria must build a stronger financial culture that teaches citizens and businesses how to effectively use debt, equity financing, venture capital, private investment, and public market listings to grow productive enterprises.
He further emphasized that attracting investment requires more than tax incentives. Investors, he said, are primarily concerned about uncertainty. Policy reversals, weak contract enforcement, regulatory inconsistencies, and foreign exchange instability continue to discourage both local and foreign investors.
To address these concerns, Oyedele proposed the creation of a dedicated commercial dispute resolution tribunal staffed by experts in finance and capital markets. He noted that commercial cases can spend up to 15 years moving through Nigeria’s court system, a delay that many investors find unacceptable.
The minister also highlighted what he described as a “prejudice premium” faced by African countries in international debt markets. Despite Nigeria never defaulting on its obligations, he said the country still pays significantly higher borrowing costs than many developed economies.
Looking ahead, Oyedele challenged stakeholders to build a $1 trillion Nigerian capital market within the next decade. He pointed to the remarkable growth of the Nigerian stock market, whose capitalization rose sharply between 2025 and 2026, as evidence that such an ambition is achievable.
He also advocated wider participation in investment opportunities, suggesting that every university graduate should leave school with an active investment account. Market women, cooperatives, and small business owners, he said, should also have access to regulated investment vehicles.
The minister concluded by calling for innovative financing options to close Nigeria’s massive small business funding gap, insisting that banks and government alone cannot meet the financial needs of the nation’s entrepreneurs. His message was clear: debt, when properly managed, is not a burden but a powerful tool for accelerating economic growth and national development.