Finance Minister Oyedele Laments Govt’s Loans Spree, Debt Service-To-Revenue Ratio
The Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, has declared that Nigeria could not borrow its way to development, warning that the country must shift its focus from debt dependency to domestic resource mobilisation and economic productivity.
Oyedele made the statement on Thursday in Abuja during a town hall meeting on the 2027 budget framework, held at the Ministry’s headquarters.
The Minister noted that while borrowing remained a legitimate tool for funding infrastructure and development projects, Nigeria’s current debt service-to-revenue ratio had become unsustainable.
“We have reached a point where we must ask ourselves: are we borrowing to develop or borrowing to survive? The answer is clear. Nigeria cannot keep borrowing its way to development,” Oyedele said.
He disclosed that the Federal Government was working on a comprehensive fiscal strategy to increase tax revenue, block leakages, and reduce reliance on foreign and domestic loans.
Oyedele explained that the proposed 2027 budget would prioritise capital expenditure, with a focus on infrastructure, healthcare, education, and social safety nets, rather than recurrent spending.
The Minister also hinted at the introduction of new fiscal policies aimed at expanding the tax base without overburdening low-income earners.
He said the government is targeting a tax-to-GDP ratio of 18 per cent within the next six years, up from the current estimated 12 per cent.
Oyedele further revealed that discussions are ongoing with state governors to harmonise tax collection systems and eliminate multiple taxation, which he said discourages investment and complicates compliance.
The Minister dismissed suggestions that the government should halt borrowing entirely, explaining that strategic borrowing for critical infrastructure remains necessary, but only as part of a broader revenue expansion plan.
Nigeria’s total public debt stock stood at N159.28 trillion as of December 31, 2025, according to the Debt Management Office.
The World Bank had earlier warned that Nigeria risks a debt crisis if urgent fiscal consolidation measures are not implemented.
Oyedele assured Nigerians that the government remains committed to reducing fiscal deficits and ensuring that borrowed funds are channelled into projects that generate economic returns and create jobs.
The town hall meeting was part of ongoing stakeholder consultations ahead of the presentation of the 2027 budget to the National Assembly later this year.
