Nigeria’s Debt Crisis Deepens: Borrowing for Consumption Is ‘Economic Cancer’ - New Warning Sparks Outrage

Mr. President, when borrowing is done for consumption rather than production, as it is in Nigeria today, it is not only leprosy but also a deadly cancer.

A country's autonomy, reputation, and general well-being are gradually eroded by borrowing for consumption. Debt, especially debt devoid of production, is one of the main "leprosies" afflicting Nigeria today. debt that has no quantifiable economic worth. debt that does not result in growth, employment, or higher living standards for Nigerians. 

Reckless borrowing is not a feature of any major economy. Countries borrow money with a clear plan for payback through profitable investment, discipline, and purpose.

According to the Fiscal Responsibility Act of 2007, "Any government in the Federation or its agencies and corporations desirous of borrowing shall, specify the purpose for which the borrowing is intended and present a cost-benefit analysis, detailing the economic and social benefits of the purpose to which the intended borrowing is to be applied."
A cost-benefit analysis must demonstrate how the loan would be used, how it would affect economic growth, and how it would enhance Nigerian citizens' wellbeing in quantifiable ways.

The majority of this government's borrowings do not meet legal or economic common sense conditions. The massive borrowing to far does not demonstrate how the projects funded by the loans improve Nigerians' welfare and the country's ability to produce.

Because Nigeria has one of the highest debt servicing percentages in the world, these debts pose a threat to the country's ability to grow economically in the future. The debt-to-GDP ratio is less important than the debt-to-debt servicing ratio since the latter limits our ability to fund the industries that propel economic expansion and human development.

If the funds are misused, as they are now in Nigeria, there is double hazard since current revenue is being used to pay off debts that did not increase revenue or increase future production potential.

In addition to defending borrowing, a responsible government explains, justifies, and—above all—makes sure it benefits the populace.

A new Nigeria is POssible.