By Jude Dike, PhD
“By the time the bill arrives, the meal has already been eaten”
Consider a Nigerian household at the end of a long month. The salary has arrived. School fees have been paid. Rent has taken its share. Food has taken more than expected. Transport has become a calculation. Electricity has become another bill. A medical emergency appears. There is still twelve days before payday.
So the household borrows. Not because anyone woke up wanting to become a debtor. Because tomorrow arrived before the money did.
Now move from the household to a small business. A trader needs ₦2 million to replenish stock. Prices have risen. Customers are buying in smaller quantities. The trader cannot wait three months to save the money. So she borrows.
Move again, this time to a manufacturer.
The company wants to buy equipment that could increase production. The bank is willing to lend, but at a price high enough to make the investment difficult to justify.
And then move to Abuja. The Federal Government needs more money than it collects. So it borrows. Different borrowers.
Different lenders. Different reasons.
But the same economic idea is connecting them: Nigeria is increasingly borrowing against tomorrow to finance today.
And the question nobody wants to ask loudly enough is not simply how much Nigeria owes. It is: Who is paying for all this borrowing and what are we getting in return?
₦159 trillion is not just a number
Nigeria’s public debt stood at ₦159.28 trillion at the end of 2025, according to the Debt Management Office. That was an increase of about ₦14.6 trillion from the previous year. Domestic debt accounted for roughly ₦84.85 trillion.
Those numbers are so large that they have almost become meaningless to ordinary Nigerians. A trillion naira is an abstraction.
So let us bring it down to something more familiar. Debt is future money. Every time government borrows, it is making a claim on revenue that has not yet been collected. Every time a household borrows, it is making a claim on salary that has not yet been earned. Every time a business borrows, it is making a claim on profits it hopes to make.
Debt is tomorrow’s income wearing today’s clothes.
And the Nigerian government is borrowing on a scale that makes the interest bill impossible to ignore.
The Federal Government’s 2026 budget provides for roughly ₦15.8 trillion in debt service, against projected federal revenues of about ₦36.9 trillion. That means a very large portion of what the government expects to collect is already committed before a minister spends a naira on a new programme.
The International Monetary Fund frames the problem differently: Nigeria’s debt burden, measured against GDP, is not exceptionally high by international standards. But the country’s interest burden relative to government revenue is far more uncomfortable.
That distinction is everything.
Nigeria does not necessarily have a debt-size problem. It has a debt-affordability problem.
A rich man can owe more than a poor man and still be safer. The question is not only what you owe. The question is what you earn.
Meet the Nigerian salary earner
Imagine a mid-career employee in Lagos earning ₦500,000 a month. The figure sounds respectable until the month begins. Rent is annual rather than monthly. School expenses arrive in lumps. Transport rises. Food rises. A parent needs medical treatment. Then the car develops a problem.
The employee does what millions of people do: borrow. Maybe it is a salary advance. Maybe it is a cooperative. Maybe it is a bank loan. Maybe it is a fintech.
The financial system has made borrowing remarkably easy. But easy access to credit can conceal a difficult truth: The borrower is not creating new income. He is moving future income into the present.
And when the next salary arrives, it is already partially spent. Then the next month arrives. And the next. The borrower is no longer simply earning a salary. He is earning a salary with creditors standing in line ahead of him.
That is how a national debt story becomes a kitchen-table story.
Now meet the market trader
Consider a trader in a Lagos or Kano market who sells food, clothing or household goods.
Her problem is not necessarily lack of customers. It is working capital.
Suppose she needs ₦3 million to replenish stock. If she waits to save it, the opportunity disappears. If she borrows it, she can buy the goods today and sell them tomorrow.
That is what economists want credit to do.
Finance productive activity. Create turnover.
Create profit. Create employment. Create tax revenue.
There is nothing inherently wrong with that.
In fact, productive borrowing is one of the engines of capitalism. The problem begins when the cost of the money starts eating the return on the business.
If the trader’s profit margin is 15 percent but the effective cost of financing is approaching or exceeding the economic return she can make, the loan stops being a bridge to growth. It becomes a tax on survival.
And this is one reason Nigeria’s interest-rate story matters far beyond financial markets.
When money is expensive, a spreadsheet can kill a business before a customer ever gets the chance.
Then there is the SME owner
Here is another Nigerian paradox.
Everyone says Nigeria needs businesses to scale. But scaling requires capital. A manufacturer wants another production line. A logistics company wants twenty more vehicles. A food processor wants a larger warehouse. A software company wants engineers. A hotel wants rooms. A farmer wants irrigation.
All of them need money before they make money. And yet the cost of capital can make the arithmetic brutal.
This is where government borrowing matters to the private economy.
Banks have limited pools of capital. Investors have choices. If government securities offer attractive returns with relatively low credit risk, financial institutions have a powerful reason to put money into government paper.
The Central Bank of Nigeria itself describes government securities as carrying zero-default risk and notes that they can be used as collateral for borrowing.
For a bank executive, this is not an ideological question. It is a risk-management question. Why lend to a fragile small business at a high cost, with all the uncertainty of repayment, when government paper offers an attractive return with much lower perceived risk?
The entrepreneur sees a bank saying:
“Your business is too risky.” The bank sees a balance sheet saying:
“Government is the safer customer.”
Both can be rational. And together they can produce a national problem.
The banker nobody thinks about
The Nigerian bank executive is an important character in this story because he or she is often portrayed as the villain when interest rates rise. That is too easy.
Banks are not charities. They take deposits and lend money. They have to price credit for inflation, default risk, liquidity, regulation and the cost of obtaining funds.
If inflation is high and monetary policy is tight, cheap loans become difficult to manufacture. The banker therefore has a choice. Take more risk for a lower return. Or lend to borrowers perceived as safer.
And the Nigerian government is one of the safest borrowers available in the domestic market.
This is how a government borrowing decision can travel quietly through the financial system until it reaches the entrepreneur.
The government does not have to tell a factory owner, “I am taking your loan.” The price of money can say it for the government.
And then there is the fintech borrower
This may be the most revealing borrower of all. Because fintech credit has changed the psychology of borrowing. The old loan required forms. A bank officer. A branch. Collateral. Waiting.
The new loan can be sitting inside a phone. That convenience is revolutionary. It can also be dangerous. A person who cannot meet an unexpected ₦100,000 expense may be able to obtain the money in minutes. The emergency is solved.
But the income needed to repay it has not changed. This is the distinction Nigeria’s credit revolution must learn to make: Access to credit is not the same thing as access to prosperity.
Credit can rescue a household. It can also trap one. It can fund a business. It can also finance consumption that produces no future income. It can smooth a temporary shock.
It can also turn a temporary shock into a permanent monthly obligation.
That is why the recent CBN data on consumer credit deserve more attention than they have received.
Outstanding consumer credit was reported at about ₦3.03 trillion in February 2026, after a significant monthly decline. The decline came amid an environment of elevated borrowing costs.
That sounds like deleveraging. Perhaps some of it is. But another interpretation is less comforting: people may be borrowing less because they cannot afford to borrow more.
A person who cannot afford a loan has not necessarily become richer. He may simply have run out of credit.
Now meet the government bond investor
There is another Nigerian who rarely appears in the debt story. The investor. The pension fund. The institutional investor. The individual who buys government securities. This person is not the villain either. He is doing exactly what an investor is supposed to do: putting capital where the risk-adjusted return makes sense.
And government debt can be an attractive asset. The irony is that the same system can therefore reward the investor while making life harder for the entrepreneur.
The investor says: “Government debt gives me a good return.
The entrepreneur says:
“Why is my loan so expensive?”
The answer may be the same market. Money is being allocated toward the borrower offering the best combination of yield and perceived safety. That is capitalism working.
But it raises a national question: Is Nigeria’s financial system rewarding the creation of future wealth or increasingly rewarding the financing of the present state?
That is a question worth asking without blaming either the banker or the investor.
This is where ₦159 trillion becomes personal
Imagine seven Nigerians.
A civil servant with a salary advance. A trader borrowing to refill her shop. An SME owner trying to finance machinery. A bank executive deciding which loans deserve scarce capital. A fintech customer borrowing for an emergency. A pension fund investing in government securities. And a taxpayer who has never borrowed a naira from anyone.
They appear to have nothing in common. They do. They are all connected to the same price of money.
When government borrowing rises, the financial system feels it. When interest rates rise, businesses feel it. When businesses cannot expand, workers feel it. When’ incomes fail to keep pace with living costs, households borrow. When households borrow, they commit future income. When government debt requires more servicing, government has less fiscal room.
And when government has less fiscal room, taxpayers eventually confront the consequences through taxes, inflation, reduced services or slower public investment.
This is not a straight line. Economies are more complicated than that. But the connections are real. And they are precisely why debt should not be discussed as though it were merely an accounting entry in Abuja.
The subsidy taught us something about this
For years Nigerians were told that the fuel subsidy was costing the country enormous sums. Then it was removed. The savings were supposed to create fiscal space.
But fiscal space can disappear surprisingly quickly. Higher debt-service costs. Higher government spending. Exchange-rate effects. Infrastructure requirements. Social interventions.
The savings do not automatically become money available for everything else. This is why the debt conversation matters.
A government can make a difficult reform and still discover that its fiscal position remains constrained. It can increase revenue and still borrow. It can grow the economy and still have a large financing requirement. It can reduce its debt-to-GDP ratio and still have an uncomfortable interest bill.
Reform does not abolish arithmetic.
Nigeria is not bankrupt.
This distinction matters. There is a temptation whenever debt reaches a new headline number to declare that Nigeria is heading toward collapse.
That is lazy analysis. Nigeria’s debt-to-GDP ratio remains much lower than that of many advanced economies.
The IMF’s latest assessment projected Nigerian real GDP growth at around 4 percent in 2026. It also emphasized the country’s improving macroeconomic position even while warning about fiscal and social vulnerabilities.
Nigeria has options. It has resources. It has a huge domestic market. It has entrepreneurs.
It has a banking system. It has pension assets. It has capital markets. It has oil and gas. It has a growing tax base.
And it has already demonstrated that reforms can materially change the government’s fiscal position.
The story is therefore not: “Nigeria is doomed.”
The story is much more interesting.
It is: “Nigeria has very little room for waste.”
The question is what the borrowing bought
This should become the new national argument.
Not: How much did Nigeria borrow?
But: What did Nigeria build with it?
If borrowed money builds a power plant that lowers the cost of electricity for factories, the debt may be productive.
If it builds transport infrastructure that cuts logistics costs, productive.
If it finances irrigation that raises agricultural output, productive.
If it expands a port and makes Nigerian exports more competitive, productive.
If it funds education and health that raise human capital, productive.
But if borrowing simply keeps a fiscal machine running without increasing the economy’s capacity to generate future revenue, the country has a problem.
Debt is not dangerous because it is debt.
Debt is dangerous when the asset disappears but the repayment remains.
That sentence should be printed above every government borrowing committee in the country.
The bill comes due quietly
There is no national alarm when ₦1 billion of debt is issued. There is no siren. No petrol queue. No dramatic headline.
The money arrives. The project begins. The government pays its bills. Everyone moves on. Years later, the interest appears in the budget.
Then another bond matures. Another loan must be refinanced. Another creditor must be paid. And suddenly the government discovers that part of tomorrow’s revenue belongs to yesterday.
That is the peculiar magic of debt. It makes tomorrow’s sacrifice invisible when today’s money arrives.
The Nigerian dream should not be bigger credit.
It should be greater capacity to live without it. For the government, that means stronger revenue. For banks, it means an economy where productive businesses become less risky. For SMEs, it means affordable long-term capital. For households, it means wages capable of absorbing ordinary shocks.
For investors, it means more opportunities to finance businesses that create wealth rather than simply financing the government.
And for young Nigerians, it means entering adulthood with assets, skills and income, not a phone full of repayment notifications. Because there is something deeply revealing about an economy in which a young person can obtain ₦100,000 in minutes but cannot obtain a mortgage at a sensible rate.
Something is backwards. We have become very good at financing consumption. We are still learning how to finance ownership. And that brings this story back to the question raised in the last What Nobody Is Saying column about the Dangote IPO.
Who owns the machines?
Because ultimately, that is still the question.
If Nigerians borrow more and more simply to consume what other people produce, they remain customers.
If Nigerians can borrow affordable capital to build factories, farms, technology companies, logistics networks, housing and other productive assets, they become owners.
And ownership changes the economics of a country.
The bill is not ₦159 trillion.
Not really. The real bill is the opportunity cost.
The road that is not built. The factory that is not financed. The small business that does not expand. The worker whose salary disappears into repayments. The family that postpones education. The entrepreneur who decides the numbers no longer work. The investor who chooses a government bond because the private sector is too risky. The young Nigerian who discovers that the easiest thing to own is debt.
Those are the costs that never appear in the debt stock. They are the invisible bill.
And they are the reason the headline number should not frighten us as much as the question behind it.
Nigeria can borrow. Nigeria can even borrow substantially more if the money is used intelligently and the revenue base grows with it. But there is a line every country eventually encounters.
It is the line between borrowing to build the future and borrowing because the present cannot pay for itself. Nobody knows exactly where that line is. But Nigeria should be very careful about approaching it.
Because the most dangerous debt is not necessarily the debt that causes default.
It is the debt that quietly takes tomorrow’s choices away.
A country can grow at 4 percent and still borrow its way into a smaller future. It can build bigger budgets while leaving less money to build the future. It can make credit easier to obtain while making ownership harder to achieve. And it can celebrate the money arriving today without asking who will be waiting for it tomorrow.
That is the conversation Nigeria needs now. Not whether borrowing is good or bad Not whether debt is high or low. But the question that sits underneath all of it:
When Nigeria borrows ₦1 today, what will Nigerians own tomorrow?
Because if the answer is nothing, then the country did not borrow for the future.
It borrowed the future.
About the Columnist
Dr. Jude Dike is a Nigerian-Canadian economist, public policy analyst, and best-selling author.
As the columnist behind What Nobody Is Saying he brings a distinctive blend of academic expertise, government experience, international development insight, and public-policy analysis to the national conversation.
With a PhD in Economics and a master’s degree in Oil and Gas Economics from the United Kingdom, the columnist has built a versatile career spanning academia, government, international development, and policy advisory. His professional experience includes serving as a college professor, World Bank consultant, senior legislative aide, senior government adviser, political strategist and public policy analyst.
Drawing on this broad experience, What Nobody Is Saying offers incisive, independent commentary on Nigeria’s economy, politics, governance, public policy, energy sector, and the forces shaping the country’s future. Styled in the tradition of serious, analytical newspaper commentary, the syndicated column seeks to examine the issues beneath the headlines, challenge conventional thinking, and give voice to perspectives that often go unspoken.
As a Nigerian-Canadian with extensive international exposure and deep knowledge of Nigeria’s political economy, Dr. Dike brings a uniquely cross-cultural perspective to the country’s most consequential debates, asking not merely what is happening, but what nobody is saying about why it is happening and where it may lead.
