Call for Enhanced Borrowing Framework Amid Rising Public Debt
The Coalition for Economic and Fiscal Justice (EFJC) has urged the federal government to prioritize poverty reduction as a critical measure of economic success. The coalition argues that economic policy should fundamentally aim to enhance human welfare rather than merely achieve macroeconomic stabilization. This assertion was presented during a meeting with Taiwo Oyedele, the Minister of Finance and Coordinating Minister for Economic Affairs, in Abuja on Thursday. Eze Onyekpere, Executive Director of the Center for Economic and Social Justice (CENSOJ), represented the EFJC in the discussions.
While the EFJC acknowledges the importance of macroeconomic stability—stating that sustainable growth is unfeasible without fiscal discipline and stable inflation and exchange rates—it emphasizes that such stability should ultimately enhance opportunities, create productive jobs, and improve the quality of life for citizens. The coalition highlighted a pressing issue facing Nigeria today, which development economists refer to as “growth without inclusion.” The group argued that economic growth should be a vehicle for job creation and inequality reduction, contending that finance should serve as a means to elevate human welfare.
The EFJC’s recommendations are oriented around a central theme: assessing the success of Nigeria’s economic reforms not only by macroeconomic indicators but also by their capacity to alleviate poverty, generate decent employment, enhance public services, fortify national resilience, and broaden opportunities for all citizens. In presenting these observations, the EFJC advocates for a people-centered economic reform agenda.
Addressing Nigeria’s escalating public debt, the coalition has called for the implementation of a “better borrowing” framework aimed at curbing rising debt levels while ensuring that future borrowing practices support sustainable economic development. Noting the urgent need for prudence in public borrowing, the EFJC stressed that, in a modern economy, borrowing itself is not detrimental. What matters is the purpose of the borrowing, whether the funds will finance productive investments, and if those investments will yield sufficient economic returns capable of servicing the incurred debts.
The Debt Management Office has indicated that Nigeria’s public debt is forecasted to rise from ₦87.38 trillion in June 2023 to an estimated ₦159.28 trillion by the close of 2025, reflecting one of the most rapid debt accumulations in the nation’s history. Simultaneously, debt servicing is consuming a growing share of the federal government’s retained revenues, thereby constraining fiscal resources available for essential areas like education, healthcare, infrastructure, and social investment.
Despite a comparatively moderate debt-to-GDP ratio relative to many emerging economies, the EFJC argues that a more pertinent measure is the ratio of debt service to revenue. The coalition emphasized that nations repay their debts with revenues rather than GDP, underscoring the necessity of fiscal responsibility laws that mandate governments to maintain sustainable debt levels, ensuring that borrowing supports capital expenditures and human development.
Consequently, the coalition respectfully recommends that the government adopt a ‘Better Borrowing’ framework grounded in five guiding principles: borrowing exclusively for productive investments, publishing cost-benefit analyses for significant loans, promoting public engagement and transparency in debt management processes in line with fiscal responsibility regulations, prioritizing concessional financing, and establishing measurable development outcomes for every naira borrowed. The EFJC stated that borrowing should serve not only as a mechanism for covering budget gaps but also as a pathway for sustainable development.
