Nigeria’s debt rise not due to N80tn new loans, the Federal Government told the Senate on Monday, arguing that much of the increase in the country’s public debt stock reflects accounting adjustments rather than fresh borrowing under the administration of President Bola Tinubu.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, made the clarification while appearing before the Senate Committee on Finance to defend the state of the economy and the government’s fiscal management strategy.
Responding to concerns raised by Senator Adamu Aliero (Kebbi Central) over reports that the current administration had added about N80tn to the N75tn debt stock inherited from the previous government, Oyedele said the figures had been widely misinterpreted.
According to him, simply comparing the public debt stock at the start of the administration with current figures does not accurately reflect the amount of new borrowing undertaken by the government.
“When this administration came into office, public debt was around N75tn. Many people simply compare that figure with today’s debt stock and conclude that this government has borrowed massively,” Oyedele said.
He explained that the depreciation of the naira following economic reforms significantly increased the naira value of Nigeria’s foreign-denominated debt.
“Following the reforms and the depreciation of the naira, the foreign currency component of our public debt had to be revalued because Nigeria reports its debt in naira. That accounting adjustment alone added more than N40tn to the public debt figure,” he said.
Oyedele further disclosed that another major contributor to the increase in the public debt stock was the securitisation of Ways and Means advances obtained by the previous administration from the Central Bank of Nigeria.
According to the minister, about N33tn was added to the debt stock after the National Assembly approved the conversion of those obligations into formal debt instruments.
“About N33tn was added to the public debt through that process. It was not new borrowing; it was simply bringing previously existing obligations onto the official debt books,” he said.
He noted that these factors have not always been adequately explained in public discussions, leading to misconceptions about the level of borrowing under the current administration.
“The actual amount this administration has borrowed is nowhere near what many people believe. Even for domestic borrowing, much of it is refinancing. Debt that was borrowed previously matures, and the government raises new debt to refinance it. That is not new borrowing,” Oyedele added.
The minister maintained that the administration has adopted a prudent borrowing approach aimed at supporting infrastructure development and other productive investments capable of stimulating economic growth.
“This administration has been very responsible in its borrowing. We understand the concerns of Nigerians and of the distinguished senators, but we remain fully committed to debt sustainability,” he said.
“We see debt as leverage. Every naira and every dollar borrowed should generate more value than the amount borrowed.”
According to Oyedele, the government remains focused on ensuring that debt is used to finance projects that enhance productivity and strengthen the economy rather than recurrent expenditure.
Despite the government’s explanation on public debt, some senators expressed concerns about delays in implementing the capital component of the 2026 budget.
Senate Chief Whip Tahir Monguno and Senator Aliero reportedly warned that slow releases of capital funds could undermine budget performance and delay critical infrastructure projects.
Monguno described the non-implementation of the capital component of the budget as a serious constitutional issue that requires urgent attention.
However, Chairman of the Senate Committee on Finance, Senator Sani Musa, defended the economic management team and assured lawmakers that progress on capital projects would soon become more visible nationwide.
Following a closed-door session with the minister and members of the economic team, Musa disclosed that discussions were underway to improve budget execution and align expenditure with available revenues.
“A performance- and priority-based budgeting system is being looked at to replace the envelope system and also revert to the old system of payments for contractors,” he said.
