Peter Obi Raises Alarm Over Tinubu Government’s $11.6 Billion Debt Servicing Plan

Peter Obi says Nigerians should be worried about the Federal Government’s projected $11.6 billion debt servicing plan for 2026, warning that rising debt obligations could undermine investments in healthcare, education, and poverty reduction.

By Folarin Aluko

Former Anambra State governor and presidential aspirant Peter Obi has expressed concern over Nigeria’s projected $11.6 billion debt servicing plan for 2026, warning that the country’s growing debt burden should worry Nigerians and trigger serious conversations about the government’s fiscal priorities.

Obi made the remarks in a statement shared through his official X account on Monday, where he questioned the sustainability of Nigeria’s rising debt profile under the administration of Bola Ahmed Tinubu.

According to Obi, borrowing itself is not necessarily a problem if the funds are invested prudently in productive sectors capable of generating long-term economic growth and improving citizens’ living standards.

However, he argued that Nigeria’s current borrowing pattern has largely failed to produce visible developmental outcomes that justify the scale of the country’s growing indebtedness.

“A huge proportion of past borrowing has been directed toward consumption, with limited visible or sustainable developmental outcomes to justify the scale of indebtedness,” Obi stated.

The former governor noted that a significant portion of the debt currently being serviced was accumulated during the Tinubu administration, while additional borrowing continues at a rapid pace.

He pointed to several recent external borrowing arrangements, including approximately $5 billion from First Abu Dhabi Bank in the United Arab Emirates, $1 billion through UK Export Finance and Citibank London, an additional $516 million arranged through Deutsche Bank, and another $1.25 billion reportedly under consideration from the World Bank.

According to Obi, these new commitments push Nigeria’s recent external borrowing obligations to roughly $7.8 billion, excluding ongoing domestic borrowing through monthly bond issuances.

The former Labour Party presidential candidate also compared Nigeria’s proposed debt servicing obligations with allocations to key social sectors in the 2026 budget.

He explained that the proposed budget allocates about ₦2.46 trillion to healthcare, ₦2.56 trillion to education, and ₦865 billion to poverty alleviation — amounting to a combined total of roughly ₦5.885 trillion.

By contrast, Obi noted that projected debt servicing costs of approximately ₦17 trillion to ₦18 trillion are nearly three times higher than the combined allocations to health, education, and social protection.

“This imbalance highlights a troubling fiscal reality in which debt obligations increasingly crowd out investment in human capital and poverty reduction,” he said.

Obi also warned that even the limited budgetary allocations to critical sectors may not be fully released or effectively utilized, further weakening their impact on national development.

Drawing comparisons with countries such as Japan, United Kingdom, United States, United Arab Emirates, Singapore, and Indonesia, Obi argued that highly indebted nations are often able to manage their obligations because borrowed funds are strategically invested in sectors like education, infrastructure, healthcare, innovation, and industrial development.

According to him, such investments create productivity, generate revenue, and strengthen repayment capacity over time.

“The central issue is not borrowing itself, but whether borrowed funds are being converted into measurable productivity, inclusive growth, and improved living standards,” Obi added.

“Without this, debt servicing shifts from being a temporary fiscal obligation to a long-term structural burden that constrains development and deepens economic vulnerability.”

Obi’s comments come days after President Tinubu, speaking at the Africa Forward Summit in Nairobi, Kenya, revealed that Nigeria is expected to spend around $11.6 billion on debt servicing in 2026.

The statement has further intensified national debate over Nigeria’s debt profile, economic management, inflation, exchange rate instability, and rising living costs.

Economic analysts say Nigeria’s increasing debt servicing obligations could place additional pressure on public spending, social programmes, and infrastructure development if revenue generation does not improve significantly.

The development also comes amid shifting political alignments ahead of the 2027 elections, with Obi and former Kano governor Rabiu Kwankwaso recently joining the Nigeria Democratic Congress after participating in broader opposition coalition talks linked to the African Democratic Congress.

Observers believe Obi’s criticism reflects growing opposition efforts to challenge the Tinubu administration’s economic policies as political competition ahead of 2027 begins to intensify.