Nigeria’s Soaring Debt: ActionAid Demands Urgent Fiscal Reforms

Abuja, Nigeria – ActionAid Nigeria has issued a stark warning regarding Nigeria’s rapidly escalating public debt, which has reached a staggering N134 trillion (approximately USD 176 billion). This equates to a debt burden of nearly N620,000 per citizen, a figure significantly exceeding the recently approved minimum wage. The organization is demanding immediate and comprehensive fiscal reforms to avert a potential debt crisis.

In a press statement released Saturday, ActionAid highlighted the alarming speed at which the debt has grown, increasing by almost N13 trillion in just three months – a nearly 11% surge. This unsustainable trajectory, driven by substantial borrowing, is causing widespread concern about its impact on essential public services, poverty reduction, and the overall quality of life for Nigerians.

The organization detailed the debt breakdown, showing N63 trillion in external debt and N71.2 trillion in domestic debt. The Federal Government holds the lion’s share of this debt, while states like Lagos (N885.99 billion) and Rivers (N389.20 billion) carry the heaviest regional burdens. This disparity highlights the need for both federal and state governments to critically re-evaluate their spending priorities and debt management strategies.

ActionAid pointed out the devastating consequences of this debt on ordinary Nigerians, stating that millions lack access to adequate healthcare, education, and clean water. The organization questioned the effectiveness of the fuel subsidy removal, intended to free up resources and reduce borrowing. Despite this policy, the debt continues to climb, raising concerns about the allocation and transparency of the funds saved.

The organization emphasized that the debt-to-GDP ratio has surpassed 50%, significantly straining the economy and limiting the country’s ability to secure further funding. ActionAid urged several key reforms, including:

Reducing allowances for high-ranking government officials: This, they argue, would free up crucial funds for essential social programs.

Overhauling fiscal policies:

Prioritising the needs of the poorest and most marginalised populations.
Reforming the taxation system:

Implementing more progressive measures to ensure wealthier individuals and corporations contribute their fair share.

Eliminating wasteful expenditure: Improving efficiency and transparency in government spending.

Diversifying revenue streams: Reducing reliance on borrowing.

ActionAid Nigeria’s Country Director, Andrew Mamedu, stressed the urgency of the situation, stating that the current path is unsustainable and unacceptable.

The organisation called for a people-centred approach to development, prioritising human welfare and ensuring that every naira borrowed has a demonstrably positive impact on the lives of Nigerians.

ActionAid pledged to continue advocating for policies that protect the most vulnerable and secure a sustainable and inclusive future for Nigeria.