Presidency Defends Borrowing, Promises Inflation Relief
By TINA TOLUTOPE
NIGERIA’S debt profile, inflation rate, and economic strategy have once again come under public scrutiny, but the Presidency insists the outlook is far more positive than many believe.
Dr. Tope Fasua, Special Assistant to the President on Economy, while appearing on Channels Television’s The Morning Brief, argued that Nigeria is “under-borrowing” relative to its economic size. He stressed that public fears of unsustainable debt were misplaced, noting that debt-to-GDP has eased to 39 percent since 2023—a sharp reduction from what he described as “dangerous levels” just a few years ago.
“At 39 per cent of GDP, Nigeria is actually under-borrowing,” Fasua said. “In 2022, debt servicing once reached 120 per cent of revenues, meaning we had to borrow extra just to pay interest. But as of last month, debt servicing costs are down by 64 per cent, and states have reduced their debts by 42 per cent between 2023 and 2024.”
For him, borrowing is not a weakness but a necessity. Comparing Nigeria to a growing company, Fasua argued that loans are vital to fund expansion and close the country’s vast $3 trillion annual infrastructure gap. “Roads, power, and other critical projects demand financing. Infrastructure is central to tackling multidimensional poverty,” he said, insisting that the government has already lifted millions out of poverty through such investments.
However, debt concerns remain real. The Debt Management Office (DMO) reported that Nigeria’s external debt stood at $45.97 billion (₦70.63 trillion) in Q1 2025—up 26 percent from the previous year, largely due to fresh loans and naira depreciation. Critics warn that rising obligations could undermine future growth.
On inflation, the Presidency struck an optimistic note. Fasua said that Nigeria’s headline inflation had dropped to 20.12 percent in August 2025, down from 21.88 percent in July, marking what he called a “consistent decline” after years of painful price surges. He dismissed opposition leader Atiku Abubakar’s recent claim that Nigerians were “dying of hunger” as political rhetoric, arguing that food prices were beginning to stabilise.
“For the first time in years, we didn’t see the usual spike in tomato prices. Farmers are even saying the government’s measures are keeping food prices low enough to hurt their profits,” he explained.
The Presidential aide also pointed to a stronger naira—briefly trading in the ₦1,400/$1 range for the first time in months—and rising crude oil prices as proof that government reforms were yielding results. “Nigeria’s inflation will get to single digits,” he declared. “It’s a matter of time.”
While insisting that the administration welcomes constructive criticism on its borrowing choices, Fasua maintained that the fundamentals of the economy are moving in the right direction. Still, with debt climbing in naira terms and inflation still biting households, the government faces the challenge of convincing skeptical Nigerians that its optimism is grounded in reality.
