An image of dollars, representing the foreign facilities Nigeria has been taking since 2023. Now, the citizens are deeply concerned about Tinubu and his frequent loans, as they argue that they have not witnessed tangible economic progress.

Tinubu and frequent loans are siamese twins. Government claims it’s for key projects but Nigerians are yet to see tangible progress. Why borrow more when subsidy savings are raking in billions?

Nigeria’s government’s recent move to acquire a $2.2 billion foreign loan has raised a flurry of concerns. This request comes amid government claims that removal of fuel subsidies has yielded over $20 billion in revenue. The government, under President Bola Tinubu, has already borrowed about $6.45bn from the World Bank in just 16 months. Many Nigerians are then  puzzled: why borrow more when the country has found a financial windfall?

The Bola Tinubu government removed the fuel subsidy last year. Finance Minister, Wale Edun, claims over $20 billion has been raised since then. This money was meant to be used for critical national projects. The government said it would help stabilize the economy and fund long-term infrastructure. But how exactly has this money been used? The government is yet to offer a clear breakdown.

Experts like economist Bismarck Rewane have raised concerns. “The removal of the subsidy was a positive step,” he says. “But what happens next is more important. Where is the money going?”

Dr. Rewane argues that Nigerians deserve to know exactly how these funds are being spent. Transparency is critical. Without it, people will remain skeptical. The government needs to prove that this revenue is being channeled into improving the economy. Without clear accountability, Nigerians could feel that this windfall is just another missed opportunity.

Tinubu’s borrowing habit: A growing concern

Despite the $20 billion boost from subsidy removal, the Nigerian government is still borrowing heavily. This is part of a consistent trend under Tinubu’s leadership. Since taking office, the government has taken out a series of loans to cover budget deficits. The latest loan request is for $2.2 billion to cover the 2024 deficit.

In just the past few months, Nigeria has secured multiple loans. These include a $1.5 billion loan from the World Bank, as well as a $3 billion loan from China for infrastructure projects. There was also a $5 billion eurobond issued in September 2023.

Why borrow so much money, especially when billions of dollars were expected from subsidy savings? Government officials argue that loans are essential for financing long-term projects. According to the Ministry of Finance, these loans are necessary to fund infrastructure development, improve power generation, and support key sectors like agriculture.

A deeper at Tinubu and his frequent loans

The frequent borrowing has raised eyebrows. Some financial experts believe this borrowing could be dangerous for Nigeria’s long-term fiscal health. “While borrowing isn’t always bad, it has to be done wisely,” says Dr. Doyin Salami, an ex-economic adviser to the Nigerian government. He points out that debt should be used to fund productive projects, not just to fill temporary gaps.

The government’s defense is that the loans are helping to develop critical infrastructure, especially in power and transportation. However, many Nigerians feel the burden of high debt is not being matched by visible improvements in their daily lives.

“The government needs to focus on delivering tangible results,” Dr. Salami continues. “If they keep borrowing without showing benefits, the public will lose faith.”

Oil revenue and production as double-edged sword

Oil production in Nigeria has surged recently. The Nigerian National Petroleum Corporation Ltd (NNPCL) says oil output has reached 1.8 million barrels per day. This was announced on November 14, 2024 and that exceeds OPEC target. This is a significant achievement, given Nigeria’s struggles with oil theft and pipeline vandalism in recent years. NNPC aims to reach 2 million barrels per day by the end of 2024.

However, this increase in oil output does not automatically translate into better living standards. Despite past surges in oil revenue, Nigerians have seen little improvement. Corruption, mismanagement, and lack of investment in key sectors have undermined the potential of oil wealth. Inflations aim skyward and fuel prices spike the roofs. 

SBM Intelligence, a leading market research firm, notes that Nigeria has been in this situation before. “In the past, high oil prices and high production didn’t improve living conditions. Without structural reforms, the same will happen again,” the group warns.

The government has made strides in addressing oil theft and improving security, but these efforts are only part of the solution. The bigger challenge lies in diversifying the economy away from oil dependency and ensuring that oil revenue benefits all Nigerians, not just a few elites.

Is the $2.2 billion loan a necessity or a shortcut?

The question remains: Is borrowing $2.2 billion really necessary? According to the government, the loan is needed to cover Nigeria’s 2024 budget deficit. This is because the country’s revenues are still far below what is needed to meet expenditures. While the $20 billion from subsidy removal has helped, it is not enough to fill the gap.

The government’s position is that loans help fund long-term development projects, especially in infrastructure. These loans are often viewed as investments in the country’s future. But experts caution that relying too heavily on loans can create problems down the line.

“We need to be careful with external debt,” says Dr. Ayo Teriba, an economist. “If we don’t manage it well, it could strangle the economy. Borrowing should be a last resort, not the first option.”

Call for transparency and accountability

A major issue with the government’s borrowing and spending is the lack of transparency. There has been little public information on how previous loans have been used. For example, the $1.5 billion World Bank loan was intended for infrastructure, but few details have emerged about the specific projects funded.

Nigerians have become increasingly frustrated with this lack of clarity. Without transparency, the government’s promises ring hollow. “If the government wants people to support borrowing, they must show results,” says economist Rewane. “Public trust is key.”

The government’s defense is that it is working to address these concerns. Finance Minister Edun has promised that the use of funds from the fuel subsidy removal will be tracked and reported. But until there is more transparency, skepticism will remain high.

What have Tinubu frequent loans achieved?

Since Tinubu took office, Nigeria has secured several loans. These include:

  • $1.5 billion from the World Bank for infrastructure development.
  • $3 billion from China for transportation and energy projects.
  • $5 billion eurobond issued in September 2023 for general government financing.

While some of these loans may have funded some projects, there is little evidence that they have solved Nigeria’s most pressing problems. Roads remain in poor condition, electricity supply is erratic, and unemployment continues to rise.

The government argues that it is investing in the future. “We need to borrow to build long-term infrastructure that will boost the economy,” says a senior government official. But Nigerians are left wondering: will Tinubu and his frequent loans actually improve their lives, or are they just adding to the country’s debt burden?

By Usoro I. Usoro, PhD

Dr Usoro I. Usoro, PhD is an accomplished journalist with over 30 years of experience in the media industry. Thirteen of those years, he spent primarily focusing on Health Reporting and Technology, covering critical issues and public policies. Dr. Usoro has held senior editorial positions at renowned Nigerian newspapers, including Sunday Times, Post Express, and Saturday Sun newspapers, where he influenced editorial direction and led teams to produce impactful health-related content. His deep understanding of healthcare journalism, coupled with his extensive writing experience, makes him a trusted voice in the field.

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