Only transparency can save Nigeria from a debt trap

Nigeria’s debt profile has reached troubling proportions under the administration of President Bola Ahmed Tinubu, now running into its third year. The country’s total public debt has risen to N144.7 trillion, about $94.2 billion, as of December 2024, with domestic debt standing at 51.4 per cent and external debt at 48.6 per cent.

The Debt Management Office (DMO), which ought to be a pillar of openness, has failed since last year to update the public on government expenditures. Such lapses deprive Nigerians of the transparency required to monitor how borrowed funds are deployed. At a time when debt is mounting, the silence of the DMO leaves citizens and investors uncertain about the true state of public finances.

This absence of clarity has bred mistrust both at home and abroad. Nigerians deserve to know how their resources are managed, while international partners expect credible data as a condition for sustained cooperation. The failure of the DMO to publish detailed, regular reports on borrowing and expenditure is therefore more than a bureaucratic oversight; it undermines fiscal accountability.

Only yesterday, the Speaker of the House of Representatives, Rt. Hon. Abbas Tajudeen, Ph.D., gave voice to these concerns. Speaking through the Leader of the House, Prof. Julius Ihonvbere, at the 11th Annual Conference and General Assembly of the West Africa Association of Public Accounts Committees (WAAPAC), the Speaker acknowledged the rising debt levels but noted that President Tinubu is working assiduously to strengthen Nigeria’s revenue base beyond oil. He argued that public debt, if applied responsibly, can indeed support growth and development.

The Speaker’s comments should be taken as a call for prudence, not rejection. Borrowing is not inherently destructive; it becomes damaging when accountability is absent, and when the burden of repayment eclipses the benefits of expenditure. Legislatures across the continent, he stressed, must insist that every loan be tied to clear, transparent, and people-centred outcomes.

Experts agree that one immediate corrective step is for the DMO to resume full transparency. Publishing comprehensive reports on borrowing and expenditure will reassure Nigerians and enable more effective oversight. Without such openness, it will be difficult to convince the public that debt is serving the common good rather than swelling recurrent costs.

The figures already paint a sobering picture. Debt servicing costs rose by 121 per cent in 2023, reaching N7.8 trillion, and climbed further to N13.12 trillion in 2024. This has swallowed over 80 per cent of government revenue, leaving little for essential services such as health, education, and infrastructure. The depreciation of the naira has worsened the cost of servicing external loans, while weak enforcement of fiscal responsibility laws has encouraged excessive borrowing without matching productivity.

The way forward demands both courage and reform. The government should adopt Zero-Based Budgeting so that every expenditure is justified from scratch and aligned with national priorities, rather than carried forward automatically. Stronger institutions are also critical: the DMO must be empowered and compelled to fulfil its mandate with rigour, making transparency its watchword.

Beyond financial housekeeping, policy direction must change. Borrowed funds should be channelled strictly into projects that deliver measurable value to citizens, especially in infrastructure, health, and education. Anything less will simply mortgage the future.

Nigeria is at a crossroads. The debts are real, the costs are heavy, and the room for error is shrinking. A government that insists on transparency, embraces fiscal discipline, and places the welfare of its citizens at the heart of every borrowing decision will find a path out of this crisis. Anything else will push the country further into peril.