President Bola Tinubu has defended his administration’s growing reliance on borrowing to finance infrastructure, arguing that Nigeria must shift from debt-funded consumption to investments capable of generating long-term economic returns, even as debt servicing continues to absorb about 65 percent of government revenue.
The President, in an article personally authored on Friday, said public debt stood at 35.75 percent of gross domestic product in the second quarter of 2026, a level he described as manageable compared with peer economies, but acknowledged that the debt-service burden underscores the need for greater fiscal discipline.
He said his administration was directing new borrowing towards roads, ports, railways and power infrastructure, with the expectation that the investments would expand economic activity, generate revenue and create jobs.
However, the strategy raises questions about how quickly these projects can generate sufficient economic returns to offset borrowing costs, particularly as the government’s revenue base remains constrained.
This call aligns with views of economic experts who had consistently warn of the need to reduce cost of governance and focus more on investments that will boost revenue generation
But the President said his administration has been making difficult choices since he assumed office in 2023
‘We have made difficult but necessary decisions: removing the petrol subsidy, unifying the exchange rate, modernising the tax framework, and coordinating action on inflation. These reforms have restored macro balance, quadrupled federation revenue since 2021 and rebuilt the credibility of the State’s balance sheet’
‘The results are now visible: real GDP growth reached 4.43% in Q2 2026 and 4.2% in H1, up from 2.74% in 2023, while headline inflation fell to 14.63% in September 2026 from 20.98% a year earlier’
The president however agreed that food inflation has remained high at 19.59%.
But added that Gross external reserves are rising at current $55.1 billion as of 9 October 2026, including about $46 billion in net reserves, highest in 18-years.
‘The NFEM exchange rate stood at ?1,333/US$, with the market spread below 5%, and public debt remains low compared to peers. Nigeria’s cost of borrowing keeps falling. Confidence has a price, our cost of borrowing is going down, and the country risk premium has drastically decreased.
Tinubu who stated that his administration has continued to change purpose of public borrowing, added that the current ‘objective is to increasingly direct new borrowing towards productive capital investment, while maintaining fiscal discipline, reducing refinancing pressures and ensuring that public debt translates into measurable economic value. Nigeria borrows to invest in roads, ports, rail and power that will generate growth, revenue and jobs for decades.
‘Every Naira and every dollar raised goes to assets that create value, and that value repays the debt. This is how Nigeria will reach the objective of a USD 1 trillion economy by 2030: not through consumption, but through investment in the infrastructure that makes growth possible.
‘This shift is being supported by a stronger fiscal position: tax-to-GDP has risen to 12.5% from 7%, net FAAC increased by 44% from ?15.2 trillion in 2024 to ?21.9 trillion in 2025, and Nigeria recorded a ?20.1 trillion trade surplus in H1 2026, almost double the ?10.2 trillion recorded in H1 2025.
‘The Federal Executive Council economic strategy is clear on this point: no deficit monetisation and no unfunded commitments during the pre-election period. At the heart of this disciplined shift towards productive borrowing are our administration’s legacy projects:
‘The administration is focusing productive borrowing on financing major infrastructure projects, including the Lagos-Calabar Coastal Highway; improvements to the power sector and electricity grid; the Sokoto-Badagry Superhighway; the Trans-Sahara Superhighway; and upgrades to Nigeria’s major commercial ports in Lagos.’