Peter Obi advocates productive borrowing to drive Nigeria’s growth

Former presidential candidate of the Labour Party in the 2023 election, Peter Obi, has said Nigeria’s rising debt profile is not the core problem, but rather how borrowed funds are utilised.

In a post shared on his X handle on Tuesday, Obi cited recent World Bank data indicating that Nigeria ranks as the world’s third-largest debtor with about $18.7 billion in obligations, behind Bangladesh, which owes approximately $23 billion.

According to him, borrowing in itself is not harmful, as nations often take loans to boost productivity and stimulate economic growth. He, however, stressed that debt becomes a burden when it is used to finance consumption, inefficiency, or corruption instead of investments that drive development.

Obi compared Nigeria’s economic path with that of Bangladesh, noting that around 2015, Bangladesh had a Gross Domestic Product (GDP) of about $195 billion and a per capita income of roughly $1,235. By 2024–2025, he said, the country’s GDP had expanded to between $460 billion and $500 billion, while per capita income rose to about $2,700, largely due to investments in manufacturing, textiles, energy, and human capital.

In contrast, he observed that Nigeria’s GDP declined from about $490 billion in 2015 to less than $250 billion in recent years, with per capita income falling to between $850 and $1,000. He attributed the downturn to weak productivity growth, currency instability, structural inefficiencies, and corruption.

Obi argued that while some countries borrow to expand production, exports, and incomes, others borrow without strengthening their economies or improving living standards. He maintained that loans tied to infrastructure, industry, and human development can stimulate growth, whereas borrowing linked to consumption and leakages can worsen economic stagnation.

He expressed optimism that Nigeria can achieve meaningful progress if future borrowing is directed towards productive investments rather than recurrent spending.

Meanwhile, data from the Debt Management Office show that Nigeria’s total public debt rose to N153.29 trillion as of September 30, 2025, reflecting continued increases in both domestic and external debt within a three-month period.