Another N1.7 Trillion Debt? Why the APC Government Can’t Stop Borrowing and the Better Alternatives Ignored

By ABT News Financial Desk May 12, 2026

ABUJA — It feels like a broken record: yet another multi-billion-dollar loan is in the works. The Federal Government under President Bola Tinubu is currently in the final stages of securing a massive $1.25 billion (about N1.70 trillion) loan from the World Bank. Expected to be approved on June 26, 2026, this proposed “Nigeria Actions for Investment and Jobs Acceleration” facility will be the second-largest single World Bank loan secured by this administration.

If disbursed, it will push Nigeria’s external debt past the $53 billion mark, while total public debt could balloon to an unprecedented N160.98 trillion. Between June 2023 and May 2026 alone, the World Bank has approved roughly $9.35 billion in loans for Nigeria under the current administration.

For the average Nigerian grappling with inflation, this raises urgent, frustrating questions: Why is the APC government always resorting to endless loans? Is imposing taxes and borrowing the only way they know on how to run the economy? And most importantly, who do they expect to pay back these mountains of endless debts?

Why the Current Government Keeps Borrowing

To understand why the government is constantly finding places to borrow, we must look at the structural reality of the Nigerian economy.

1. The Revenue Deficit: Despite claims of increased government revenue following the controversial removal of fuel subsidies, Nigeria still has a massive fiscal deficit. The country simply does not generate enough domestic revenue to fund its massive national budget, infrastructure projects, and the bloated cost of governance.
2. Foreign Exchange Desperation: A significant portion of this borrowing is multilateral (from institutions like the World Bank). These loans come in dollars. The government desperately needs foreign exchange to stabilize the weakened Naira and bolster the country’s depleted foreign reserves.
3. The “Concessionary” Justification: The government and some economists argue that World Bank loans are “concessionary”—meaning they offer lower-than-market interest rates and longer repayment periods. They view this as “good debt” compared to borrowing from commercial international markets.

The Problem with the “Tax and Borrow” Playbook

While the government argues these loans are meant to support economic reforms, job creation, and competitiveness, the optics are dire. Development economists, including Dr. Aliyu Ilias, have openly questioned the rationale: if subsidy removal and higher taxes are yielding more revenue as the government claims, why the aggressive borrowing spree?

Relying heavily on foreign loans poses a severe exchange rate risk. Because Nigeria’s primary earnings are in Naira, a depreciating currency means the cost of servicing these dollar-denominated loans skyrockets artificially. The Nigerian Economic Summit Group (NESG) recently warned that Nigeria’s debt outlook remains highly fragile and that we are hovering in a “high-risk fiscal environment.”

Ultimately, who pays for this? You do! And so would your children too! The Nigerian taxpayer, the everyday business owner, and the future generations will bear the brunt. When debt servicing consumes an overwhelming percentage of national revenue, the government has to squeeze the citizens through higher taxes, tariffs, and reduced spending on essential public services like healthcare and education to meet its obligations to foreign creditors.

What Are the Better Alternatives to Taxing and Borrowing?

Nigeria is uniquely positioned with vast resources and a dynamic population. There are far better, sustainable options to grow the economy without mortgaging its future:

• Drastic Reduction in the Cost of Governance: The Nigerian government is notoriously expensive to run. Before looking outward for loans, there must be a severe, verifiable cut in the recurrent expenditure of political officeholders, redundant agencies, and bloated bureaucracies.
• Public-Private Partnerships (PPPs): Instead of borrowing billions to fund infrastructure, the government should aggressively incentivize the private sector to build, operate, and transfer (BOT) critical infrastructure. Capital goes where it is welcome and safe; improving the ease of doing business will attract Foreign Direct Investment (FDI) that doesn’t need to be repaid like a loan.
• Plugging Systemic Leakages: Corruption, crude oil theft, and systemic inefficiencies cost Nigeria billions of dollars annually. If the government can secure its oil infrastructure and enforce absolute transparency in revenue-generating agencies (like Customs and the FIRS), the resulting capital would negate the need for many of these loans.
• Unlocking Dead Capital: Nigeria has trillions of Naira tied up in “dead capital”—unregistered land, abandoned federal properties, and underutilized state-owned assets. Privatizing or financially leveraging these dormant assets through transparent processes can unlock massive domestic liquidity.
• Export-Driven Industrialization: As long as Nigeria imports almost everything it consumes, the economy will suffer. The government must shift its focus from taxing struggling local businesses to aggressively supporting non-oil exports. Offering tax holidays and grants to manufacturers who process raw materials locally for export will naturally strengthen the Naira and generate real wealth.

Borrowing is not inherently evil, but borrowing without a corresponding, visible boom in economic productivity is a one-way ticket to a debt trap and doom. The APC government must realize that you cannot borrow your way into prosperity. True economic growth comes from production, efficiency, and fiscal discipline, not an endless cycle of taking from creditors and taxing the citizens to pay them back.

Stay informed with more critical financial analysis at www.abtnews.net.