The minister of finance,Taiwo Oyedele has
clarify the figures surrounding the nation’s debt profile, insisting that President Bola Tinubu’s administration has not borrowed the ₦80 trillion being widely circulated in public discourse.
Oyedele, who spoke during an economic review session organised by the Senate Committee on Finance, said the apparent increase in Nigeria’s public debt stock had largely been misunderstood, explaining that a significant portion of the rise was caused by the revaluation of existing foreign currency obligations, the formal recognition of inherited liabilities and other accounting adjustments rather than fresh borrowing.
The clarification came against the backdrop of increasing concerns among Nigerians over the country’s debt trajectory at a time when many households are facing severe economic pressures, including high food prices, inflation, declining purchasing power and rising poverty.
Nigeria’s public debt, currently estimated at about ₦159 trillion, has become a major subject of public debate, with critics questioning why government continues to borrow despite increased revenue generation by agencies such as the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service.
However, Oyedele said the figures being compared in the public space did not present the complete picture of how Nigeria’s debt position evolved.
“When this administration came into office, public debt was around ₦75 trillion. Many people simply compare the number before and the number now and conclude that this government has borrowed so much. That is not correct,” he said.
According to him, the increase in the debt stock cannot be attributed solely to new borrowing by the current administration.
He explained that more than ₦40 trillion was added to Nigeria’s debt figure following the depreciation of the naira and the consequent revaluation of the country’s foreign currency-denominated obligations.
Because Nigeria reports its debt figures in naira, he said, fluctuations in the exchange rate automatically affect the naira value of external loans, even where the government has not taken additional loans.
Oyedele noted that the foreign exchange component of Nigeria’s debt had to be adjusted following the currency reforms, resulting in a substantial increase in the reported debt figure.
He also pointed to the securitisation of the Ways and Means advances obtained by the previous administration from the Central Bank of Nigeria as another major factor responsible for the increase in Nigeria’s official debt stock.
According to him, about ₦33 trillion was added after the National Assembly approved the conversion of those obligations into formal debt.
“That was not new borrowing. It was simply bringing existing obligations onto the government’s books,” he said.
Oyedele stressed that such adjustments were necessary to improve transparency and ensure that government liabilities were properly reflected in the country’s financial records.
He also challenged the assumption that all borrowing approvals granted by the National Assembly represented money already borrowed by government.
The fiscal policy expert explained that the borrowing process involves several stages, beginning with approval by lawmakers, followed by negotiations, accessing of funds and eventual utilisation.
He said confusion often arises because approval figures are reported as though they are already drawn loans, while actual withdrawals are later reported separately.
“We have not even taken half of what the National Assembly has approved,” Oyedele said.
He added that the Ministry of Finance was working on a comprehensive public document that would provide a breakdown of borrowing approvals, actual loans accessed, amounts spent and the projects financed.
On domestic borrowing, Oyedele explained that a significant proportion of government debt operations involved refinancing existing obligations rather than taking on entirely new debt.
He said government frequently raises fresh instruments to repay maturing obligations, a process that should not automatically be interpreted as additional borrowing.
“This administration has been very responsible with borrowing. We remain committed to debt sustainability. Every naira and every dollar we borrow must add more value than the amount borrowed,” he said.
Responding to concerns over why borrowing continues despite improved revenue performance, Oyedele explained that higher revenue collection does not necessarily eliminate the need for borrowing where expenditure requirements remain higher than available resources.
Using an illustration, he said a government that requires ₦10 to fund its budget but generates only ₦6 would still need to borrow ₦4 to close the gap.
Even if revenue improves to ₦7, he explained, the government would still need to raise ₦3 to meet its expenditure obligations.
He said government spending pressures had increased due to rising debt servicing costs, implementation of the new national minimum wage, salary adjustments and various social intervention programmes.
Oyedele also cited the Nigerian Education Loan Fund (NELFUND), which he said was designed to expand access to education while reducing financial pressure on families.
Earlier during the session, Senator Tahir Monguno raised concerns over the slow pace of budget implementation despite improved revenue performance by government agencies.
Monguno argued that if revenue agencies were exceeding their targets, there should be a corresponding improvement in the implementation of government budgets and delivery of capital projects.
He said the 2025 budget was not fully implemented, with a significant portion of capital expenditure rolled over into 2026.
“The dividends of democracy are delivered through the implementation of the budget, particularly capital projects. If the budget is not being implemented, then the fundamental purpose of government is undermined,” he said.
The senator also expressed concern over funding for security agencies, saying those that appeared before the committee reported receiving no capital releases despite the country’s security challenges.
He argued that failure to implement an Appropriation Act amounted to a breach of the law, describing such a breach as “an impeachable offence.”
Monguno also questioned the distribution of Federation Account Allocation Committee (FAAC) revenues, asking why about ₦1.7 trillion was reportedly retained after about ₦3.7 trillion accrued to the Federation Account.
Also senator Adamu Aliero indicated that Former President Muhammadu Buhari Borrowed N75trn while President Tinubu has borrowed between N75 to N80tr adding that budget implementation was not where near their expectation expressing concern that budget needs to be implemented.
He said a lot has been achieved in terms of Infrastructure citing the Lagos-Calabar Coastal Highway and Sokoto-Badagry Highway however he lamented that other important roads were yet to be attended to.
Responding, Oyedele said he was not familiar with the specific figures but maintained that no FAAC allocation under the current administration had fallen below ₦2 trillion.
He explained that statutory deductions required by law, including allocations to intervention agencies and approved collection costs for revenue-generating institutions, were deducted before funds were distributed among the federal, state and local governments.
Meanwhile, Chairman of the Senate Committee on Finance, Senator Mohammed Sani Musa, said the ultimate measure of the government’s economic reforms would be whether they improve the welfare of Nigerians.
Musa acknowledged improvements in some economic indicators but stressed that economic statistics must translate into better living conditions for citizens and businesses.
“While there are encouraging signs in some key economic indicators, there is still much work to be done to ensure that the benefits of these reforms are properly felt by citizens and businesses across the country,” he said.
He said the committee’s engagement was aimed at reviewing the state of the economy, revenue performance, fiscal reforms, budget implementation, debt sustainability and government’s strategy for sustaining economic growth.
After the presentation by the economic team, Musa acknowledged recent data from the National Bureau of Statistics indicating improvements in some areas of the economy but stressed the need for stronger coordination between fiscal and monetary authorities.
“So far, so good. We have seen the statistics from the National Statistics Office showing that the economy is working,” he said.
He added that policymakers must continue to evaluate how fiscal decisions interact with monetary policies to sustain stability and ensure that economic gains are translated into broader prosperity.
The Senate session ended with lawmakers seeking further clarification on debt management, revenue utilisation, budget execution and the broader impact of government reforms on Nigerians.
Meanwhile, speaking after a closed door session with the minister that lasted for about two hours the committee chairman called for a fundamental review of Nigeria’s budget framework, advocating the adoption of a performance and priority-based budgeting system to improve implementation and ensure public funds deliver measurable results.
Senator Musa said the current budget structure requires reform because several expenditure items continue to reappear annually with increased allocations, thereby putting additional pressure on government finances.
He said both the Executive and the National Assembly must work together to develop a framework that links spending priorities with available revenue and improves the effectiveness of annual budgets.
“The National Assembly legislators and the Executive need to look at the budget framework itself because you can see so many line items that keep repeating every year, adding more to the budget itself,” Musa said.
According to him, the committee discussed the need for a transition towards a system where government programmes and projects are assessed based on performance, priority and impact rather than simply carrying over previous allocations.
He said such a system had been adopted by several countries and would help Nigeria achieve better value from public expenditure.
“Nations have been adopting performance and priority-based budgeting systems and it has been working for them. I promote it very well because I know that it is good for Nigeria,” he said.
Musa explained that the proposed reform would not necessarily involve increasing government spending but would focus on better scrutiny of recurrent expenditure, overhead costs and other budget components.
“All we need to do is scrutinise the recurrent, scrutinise the overhead, so that we will manage our budget in a way that it goes with the revenue,” he said.
He stressed the need for stronger alignment between government revenue and expenditure, saying improved fiscal management was necessary for Nigerians, especially vulnerable groups, to begin to feel the impact of economic policies.
“The revenue to our GDP should always reflect well, so that the downtrodden will be able to see that something is going on,” he said.
The Senate committee chairman also said the Finance Minister had assured lawmakers of his willingness to work with the Minister of Budget and Economic Planning to develop strategies that would improve budget performance.
Musa acknowledged that introducing a new budgeting framework would require time but said taking one or two years to establish an effective system would be worthwhile.
The senator also called for greater coordination between fiscal and monetary authorities, noting that both policies must work together to achieve economic stability.
On delays associated with government payments and documentation, Musa said the National Assembly was considering a return to aspects of the previous payment system by decentralising some processes while retaining oversight mechanisms under the Accountant-General of the Federation.
He said the move would help speed up payments and improve efficiency.
“We should revert back to the old system of payment. That is decentralising it, but still maintaining the system that is being operated at the Accountant-General’s office. That will enable the process to go faster and more efficiently,” he said.
Musa clarified that complaints over requests for payment batch numbers were based on misunderstanding, insisting that the payment system was functioning but required improvements.
“The process is working very well, but all we need is to see that the process is more efficient,” he said.
He said the closed-door session provided lawmakers and economic managers an opportunity to examine critical issues affecting the economy, including budget implementation, debt sustainability, revenue management and payment processes.
Musa said the committee briefed journalists after the meeting as part of efforts to promote transparency, adding that the minister and committee members remained available to respond to further inquiries.
|
.
Never miss a moment! Get the stories shaping Nigeria, delivered straight to your phone. Follow Peoplesdaily Newspaper on WhatsApp for breaking news, exclusive reports, and the headlines everyone will be talking about, before anyone else.
