By Keem Abdul
“In 2023, Nigeria was using 90% of revenue to service debt. Today, the budget has tripled and the debt-to-revenue ratio is down. That is not leprosy. That is recovery.”
When President Bola Ahmed Tinubu said “borrowing is not leprosy,” he wasn’t asking Nigerians to celebrate debt. He was asking them to look at context. In the last two years, headlines have focused on one number: ₦65.9 trillion borrowed. Social media has focused on one emotion: anger. What’s missing is the math between 2023 and 2026 — and the math tells a different story.
The Backlash Is Loud. The Balance Sheet Is Louder
As you’d expect, the backlash has been intense. A Daily Times Nigeria headline reported Tinubu’s defense of borrowing “if used productively and responsibly.” Critics fired back with charts showing Nigeria’s debt in 2 years outpacing the last 55 years combined. The World Bank was forced to lock its Instagram comments after Nigerians flooded the page: “Stop giving Tinubu more loans.”
Nigerians are not wrong to be tired. Debt has become a national trauma. But trauma is a bad economist. To know if we are sicker or healing, we have to start a comparative analysis, define what we’re referring to, and set the context.
The Company Nigeria: What Tinubu Inherited
“You don’t judge a new CEO by the size of the loan. You judge him by the state of the company he inherited.”
In 2023, the Tinubu administration took over a budget running a ₦11 trillion deficit. The plan was to spend ₦11 trillion more than it projected to earn. At that time, Nigeria’s debt-to-revenue ratio was about 65%. After Q1 real-term estimates, it got worse. At some point, we were actually using 90% of all government revenue to pay interest on debt.
It gets darker. The previous administration had taken money for future crude supplies ahead of time so we could fund consumption. Imagine becoming CEO of a company where current and future earnings will not cover proposed spending, yet you still have to spend to keep the lights on.
You have two options: increase your revenue base or borrow more money to survive. The Tinubu administration chose both.
Three Reforms That Reset the Math
Between 2023 and now, three structural decisions changed Nigeria’s fiscal base:
- Subsidy Removal
Politically toxic, economically unavoidable. The fuel subsidy was debt by another name — we borrowed to consume, not to build. - FX Unification
The merging of the parallel market and CBN rate caused a massive naira devaluation. It also killed the arbitrage racket that drained billions from the treasury every year. - Cheaper Credit
Nigeria transitioned from double-digit interest rates on foreign loans to single-digit rates. That’s like refinancing a mortgage from 18% to 8%. You still owe, but the bleeding slows.
Result: Nigeria’s 2026 budget is almost triple what it was in 2023, with projected revenue also increasing exponentially.
The Issue: We Still Have a Deficit
“The deficit was accepted the moment the budget was passed. Pretending borrowing is a surprise is ignoring basic arithmetic.”
And every time there is a deficit, just like the CEO, the government has two options: raise revenues either through taxation or increasing business output, or borrow. My personal favorite is cutting spending. But you cannot cut your way out of a ₦11 trillion hole while keeping a country running.
Therefore, the choice to borrow was not made yesterday. It was made the moment the budget was passed and the deficit was accepted.
Three Signs of Fiscal Breathing Room
So why is Tinubu confident? The “leprosy” comment rests on three measurable shifts since 2023:
- Debt-to-Revenue Ratio Is Down
The debt-to-revenue ratio has actually come down, evidenced by the fact that the budget has tripled. We are spending less of every naira earned on debt service than we were at the peak of the crisis. In 2023, debt service consumed 90% of revenue. Today, there is room to fund capital projects. - Investor Panic Is Cooling
Investors buying Nigeria’s bonds are not as worried about our debt exposure. Eurobond yields have come down. In market terms, that’s a vote of confidence. Money runs from risk. When yields drop, it means the world thinks you are less likely to default. - Dollar Debt Has Actually Reduced
Nigeria has not defaulted on sovereign debt obligations. In fact, total debt in USD has actually come down from $108 billion in 2023 to between $90–$95 billion now. Part of the sharp rise in debt measured in naira terms is due to devaluation, which increased the naira value of existing external debt even without new borrowing.
So, Does Nigeria Have a Debt Problem?
“So not leprosy, but certainly not whole either.”
Yes and no. Nigeria is not operating under the same fiscal conditions it faced at the peak of its revenue crisis. Revenue has improved in nominal terms and the government now has more fiscal space than when debt obligations consumed nearly everything coming in.
But the country is still heavily dependent on borrowing. Inflation remains high. The naira remains weak. And debt sustainability will ultimately depend on whether revenues can continue growing faster than obligations.
If revenue stagnates or borrowed funds are mismanaged, Nigeria could easily slide back into the same fiscal pressure that defined the years leading into 2023. But if they grow, and if this administration continues its positive trend in terms of revenue, then we will be fine.
The Tinubu Doctrine: Borrow to Transition, Not to Consume
This is the core of the administration’s PR case. Under Buhari, debt funded subsidies and FX distortions. We borrowed to consume. Under Tinubu, debt is bridging a transition away from that model.
The strategy has three pillars:
- Cheaper Money: Moving to single-digit foreign loan rates reduces the lifetime cost of debt. That matters more than the headline borrowing figure.
- Revenue First: Subsidy removal, FX unification, and tax reforms are designed to expand the base so today’s loans don’t become tomorrow’s crisis.
- Transparency: The deficit was declared in the budget. Nigerians can disagree with the borrowing, but they cannot claim it was hidden.
What Nigerians Should Watch Next
“The real PR victory is not winning Twitter. It’s when debt service stops being 90% of the story, and growth writes the next chapter.”
If this strategy works, three indicators will prove it within 24 months:
- Debt Service-to-Revenue Below 40%: Permanent relief from the 90% trap means cash for schools, roads, and power.
- FX Stability: Unification was step one. Reserves and inflows are step two. A stable naira is the clearest signal reforms are working.
- Debt-Funded Assets: Borrowed funds must be visible in rail, power, digital infrastructure, and agriculture — projects that pay for themselves.
We are not there yet. Inflation is biting. The naira is weak. But the vital signs are improving: lower dollar debt, cheaper credit, and a budget that tripled without a proportional debt spiral.
Conclusion: From ICU to Recovery Ward
In 2023, Nigeria was in a fiscal ICU. 90% of revenue went to debt service. Crude had been sold forward. Subsidies were a hemorrhage. The Tinubu administration chose painful surgery: remove subsidies, unify FX, borrow cheaper to fund the transition.
The patient is not dancing, but the patient is breathing. The debt-to-revenue ratio is down. Dollar obligations are lower. Investors are less panicked.
Nigeria is not whole. But it is not leprous. A country that can triple its budget, reduce its USD debt, and borrow at single-digit rates is a country with options.
The next 18 months will decide if this breathing room becomes a full recovery. For now, the data says what the President said: borrowing is not leprosy. When the underlying disease was 90% debt service, the real cure was fiscal space. And that space, at last, is opening up.
- Keem Abdul, a public relations guru, publisher and writer, hails from Lagos. He can be reached via text +23418038795377 or [email protected]
