Concerns have surged across the country following the Federal Government’s recent move to request a fresh ₦1.15 trillion domestic loan to support budget implementation. However, respected economist and financial analyst, Bismarck Rewane, has urged Nigerians to remain calm, emphasizing that the economic situation is not as alarming as perceived, provided the funds are utilized strategically.
The loan request, recently submitted by President Bola Ahmed Tinubu to the National Assembly, forms part of the government’s efforts to bridge the fiscal deficit and stabilize ongoing developmental programs under the current budget. The administration insists that the borrowing is aimed at sustaining essential capital projects, improving infrastructure, and strengthening economic recovery.
Why the Loan Request Became a Talking Point
Nigeria’s economy has faced multiple pressures in recent years, including rising inflation, fluctuating revenue from oil sales, and an expanding fiscal deficit. The request for another significant loan naturally triggered public debates and concerns over:
- The nation’s rising debt profile
- Debt servicing pressures on government earnings
- Fear of worsening inflation and economic hardship
These worries have been particularly amplified among citizens already battling rising living costs and high fuel and commodity prices.
Rewane: “There Is No Need to Panic”
Speaking on the matter, Bismarck Rewane reassured Nigerians that the loan request does not automatically signal danger, stressing that borrowing is a normal tool used globally to support government development plans and boost growth—as long as the debt is productive.
According to him, the critical factor lies in how effectively and transparently the funds are allocated. He noted that when loans are channeled into sectors that stimulate economic activity, such as:
- Transportation and infrastructure
- Power and energy expansion
- Manufacturing and industrial capacity
- Technology and innovation
The economy can experience job creation, enhanced productivity, and long-term stability, which eventually help offset the debt.
Understanding Nigeria’s Debt Situation
Nigeria’s total public debt has increased in recent years due to various internal and external borrowing programs. However, economists emphasize that debt is only problematic when it outpaces a country’s ability to generate revenue.
Key Considerations for Sustainable Debt Use:
| Factor | What It Means | Why It Matters |
|---|---|---|
| Debt-to-Revenue Ratio | Measures how debt compares to government income | High ratios can strain budget flexibility |
| Debt Servicing Costs | Money used to pay back interest and loans | If too high, it limits funds for development |
| Purpose of Borrowing | Whether funds are used for investment or consumption | Productive use boosts growth; wasteful use increases risk |
| Transparency & Accountability | How clearly funds are tracked and monitored | Prevents misuse and corruption |
Rewane emphasized that if revenues increase through economic growth, debt burdens naturally ease over time.
Public Reaction: Caution, Hope, and Skepticism
The announcement has drawn mixed reactions:
- Economic analysts acknowledge the necessity of borrowing during periods of revenue shortfalls.
- Citizens and workers, however, worry about the rising cost of living and fear that continued borrowing may worsen inflation.
- Business leaders are watching to see whether the funds will be invested in sectors that improve the business environment.
While trust remains an issue, experts stress the importance of transparent implementation, clearer budget communication, and stronger monitoring mechanisms to restore public confidence.
What This Means for the Average Nigerian
If the funds are effectively managed:
- Roads, power supply, and infrastructure could improve.
- Job opportunities could expand across key sectors.
- Inflation may gradually ease as productivity increases.
However, if poorly managed:
- Debt repayment could strain national finances.
- Public services may suffer.
- Inflation could worsen further.
This makes accountability and follow-through from the government crucial.
