Nigeria’s Growing Dependence On Loans

Nigeria’s development aspirations require capital. Roads must be built, power supply expanded, schools improved, healthcare strengthened, and jobs created. For decades, successive governments have relied on a mix of domestic revenues, private investment, and external financing to pursue these goals. Yet the approval of another $1.25 billion World Bank facility has once again reignited a difficult but necessary national conversation: Is Nigeria borrowing to accelerate growth, or borrowing simply to survive?

The question is not whether borrowing is inherently bad. No serious economy develops without access to credit. Even advanced economies finance infrastructure and long-term investments through debt. The real issue is whether borrowed funds are generating measurable economic returns sufficient to justify the obligations they impose on present and future generations.

The World Bank argues that the newly approved facility will support investment, job creation, competitiveness, agricultural productivity, digital reforms, and private-sector-led growth. The institution has outlined ambitious targets, including expanded electricity access, broadband connectivity, improved healthcare services, and support for millions of farmers. On paper, these objectives are difficult to oppose. Nigeria desperately needs economic expansion and employment opportunities for its rapidly growing population.

Yet public scepticism is understandable and growing. Many Nigerians look around and see a country that has borrowed repeatedly over the years, while infrastructure deficits remain glaring, unemployment stays stubbornly high, poverty remains widespread, and basic public services continue to struggle. For ordinary citizens, the critical issue is not the size of each new loan but the cumulative effect of years of borrowing with outcomes that often appear disconnected from daily realities.

This credibility challenge is compounded by growing concerns about transparency and accountability. Nigerians increasingly want to know not only how much is being borrowed but also where previous loans have gone and what measurable benefits they have produced. Every new borrowing request inevitably revives old questions: Which projects were completed? Which targets were met? Which communities benefited? And which officials can account for the outcomes? These are legitimate questions in a democracy where citizens ultimately bear the burden of repayment.

The danger is not merely financial. Debt becomes problematic when economies borrow faster than they grow. If borrowed resources are invested in productive sectors that expand revenue generation, increase exports, improve productivity, and create jobs, debt can serve as a catalyst for development. However, when loans are repeatedly used to finance recurrent expenditure, plug budget deficits, or respond to immediate crises without addressing underlying structural weaknesses, they risk creating a cycle of dependence. Debt gradually transforms from a development tool into a fiscal burden. Future governments are then left servicing obligations without inheriting matching assets. This is the point at which borrowing ceases to support growth and begins to finance survival.

Nigeria must also confront the intergenerational dimension of the debate. Every dollar borrowed today will be repaid by taxpayers tomorrow. Current leaders may negotiate the loans, but future generations will shoulder a significant share of the responsibility. This reality imposes a moral obligation on today’s policymakers to ensure that borrowed funds create enduring value. A road that improves trade, a power project that supports industries, or an irrigation scheme that boosts agricultural productivity can justify long-term financing. Waste, duplication, and abandoned projects cannot.

The challenge, therefore, is not to reject borrowing outright. Such an approach would be unrealistic and potentially harmful. Nigeria’s infrastructure and development needs remain enormous, and carefully managed concessional financing from institutions such as the World Bank can play an important role in closing critical gaps. What must be rejected is borrowing without rigorous accountability, borrowing without measurable outcomes, and borrowing without public confidence.

Government should seize this moment to establish a stronger culture of transparency around development financing. Every major externally funded programme should be accompanied by publicly accessible performance indicators. Citizens should be able to track implementation, monitor expenditures, and evaluate whether promised benefits materialise. Transparency is not merely a tool for preventing corruption; it is also a means of building trust between government and the governed.

There is a broader lesson here for policymakers. Sustainable development cannot rely indefinitely on external financing. The ultimate objective should be creating an economy capable of generating sufficient domestic revenue through productive industries, value-added agriculture, technology, manufacturing, and innovation. A nation cannot borrow its way to prosperity indefinitely. Eventually, growth must be powered by productivity rather than debt.

The latest World Bank facility may provide important support for reforms and investments. Whether it becomes a stepping stone toward sustainable growth or another addition to an expanding debt burden will depend largely on implementation, accountability, and results.

Nigeria must therefore ask itself a simple but profound question: Are we borrowing to build tomorrow or borrowing to manage today? The answer will determine not only the success of this latest loan, but also the economic legacy we leave for future generations.