Nigeria’s N152trn Debt Not Reckless Borrowing, Says Finance Minister

Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, has defended the country’s rising public debt figure of N152tn, insisting it does not reflect reckless borrowing but improved transparency, foreign exchange reforms and better fiscal reporting.

Edun made the clarification on Thursday in Lagos while delivering his first keynote address of 2026 at the launch of the Nigerian Economic Summit Group (NESG) 2026 Macroeconomic Outlook Report.

He noted that despite the nominal increase in public debt, Nigeria’s debt-to-GDP ratio has declined to 36.1 per cent, one of the lowest in Africa and well below global averages.

According to the minister, the headline debt figure has been widely misunderstood, explaining that a significant portion of the increase resulted from reforms rather than fresh borrowing.

He disclosed that about N30tn of the debt reflects previously unrecognised Ways and Means advances that have now been formally captured, while nearly N49tn arose from the revaluation of foreign currency-denominated debt following exchange rate adjustments.

“Our debt figures reflect transparency and exchange rate correction, not reckless borrowing,” Edun said, adding that the government deliberately prioritised fiscal clarity to restore confidence and credibility in public finance management.

He stated that Nigeria has moved from a phase of economic stabilisation to the threshold of consolidation, with reforms implemented over the past two years beginning to deliver measurable improvements across key macroeconomic indicators.

Edun disclosed that inflation, which peaked at 33.18 per cent in 2024, declined to 14.45 per cent by November 2025, while foreign exchange volatility has eased and external reserves strengthened to about $45.5bn.

He added that GDP growth averaged 3.78 per cent by the third quarter of 2025, supported by expansion across 27 economic sectors, while the exchange rate stabilised below N1,500 to the dollar.

The minister also revealed that Nigeria recorded a trade surplus of N19.33tn in the first nine months of 2025, while market capitalisation on the Nigerian Exchange rose by nearly 60 per cent year-on-year, reflecting improved investor confidence.

Despite revenue challenges, particularly in the oil and gas sector, Edun said the Federal Government maintained fiscal discipline in 2025, keeping the deficit at about 3.4 per cent of GDP.

He noted improvements in non-oil revenue performance, stronger fiscal federalism through higher allocations to states, and improved capital budget execution, with about 84 per cent implementation of 2024 capital projects during the transition period.

Looking ahead, Edun projected GDP growth of 4.68 per cent in 2026, with inflation averaging 16.5 per cent and the exchange rate stabilising around N1,400 to the dollar.

He said the 2026 Budget of Consolidation, Renewed Resilience and Shared Prosperity, presented by President Bola Tinubu, proposes total expenditure of N58.18tn, including N26tn for capital spending, representing about 44 per cent of the budget.

The projected fiscal deficit of about 4 per cent of GDP, he explained, is aligned with Nigeria’s development priorities, particularly infrastructure expansion, job creation and social protection. “We cannot afford to pause or retreat from reforms,” Edun said.

Also speaking at the event, NESG Chairman, Mr. Olaniyi Yusuf, said Nigeria has entered a critical transition phase that requires moving beyond short-term crisis management to building systems capable of delivering sustainable productivity gains.

He warned that while reform fatigue remains a risk, reversing reforms would be far more costly to the economy.

The NESG projected that the naira would trade at about N1,480 to the dollar in 2026, with external reserves rising to $52bn, inflation moderating to around 16 per cent and economic growth reaching about 5.5 per cent, driven by improved macroeconomic coordination and stronger output from agriculture and manufacturing.

Yusuf said consolidation represents the structural bridge between reform and results, stressing that Nigeria must shift from firefighting to system-building to translate recent stabilisation gains into sustained growth, jobs and improved living standards.