Borrowing should be controlled. It is too risky to have multiple loans running because of the cost of servicing them and the burden they create.
The National Assembly recently approved a $ 516.33 million loan from Deutsche Bank AG to finance the construction of 120km of the Sokoto–Badagry Superhighway.
The approval came barely a month after the legislature endorsed a $6 million external borrowing plan aimed at supporting the 2026 national budget, infrastructure development and debt refinancing.
Some Nigerians who spoke in Abuja on Sunday, said borrowing in itself was not bad, but cautioned against excessive dependence on loans without clear economic returns.
Sunday Azubuike, a businessman, said borrowing required careful management due to the risks involved.
“Borrowing should be controlled. It is too risky to have multiple loans running because of the cost of servicing them and the burden they create.
“I think Nigeria’s borrowing is too excessive, and we still have a lot of debt servicing to do.
“Yes, these borrowings are said to be for capital projects, but there are other ways to drive infrastructure development. The government should slow down and explore alternatives such as public-private partnerships (PPPs),” he said.
Absolome Jimba, a business man said borrowing, when properly applied, was widely regarded as a step in the right direction, particularly when targeted at boosting Internally Generated Revenue (IGR) and driving infrastructure development.
Mr Jimba, however, said the borrowings failed to point towards the aforementioned directions as there were no positive pointers towards that direction.
“The last capital budget defense in the National Assembly brought Nigerians to light as there are little or no disbursements, which raises serious concerns about implementation.
“Even with the removal of subsidy, which should have trimmed down borrowings, the effect appears negligible, like a drop of water in the ocean.
“The Federal Government has not done enough to show or prove to Nigerians the essence of its borrowings. So, in my opinion, it is risky and a clear endangerment to our economy,” he said.
Aisha Abdullahi, a public servant, said the major issue was not borrowing but the utilisation of the funds.
“We are not seeing significant development in spite of all the borrowing. Life is still hard for many Nigerians, so the impact is not being felt,” she said.
Dennis Lawson, a banker, expressed concern that the country’s rising debt profile could affect future generations.
“It is like we have mortgaged the future of our children with these loans. The loans should translate into tangible results, especially in critical sectors like security, healthcare and education,” he said.
Ochanya Ako, a trader , said she expected to see visible improvements from government spending.
“If the government is borrowing, we should see better roads, stable electricity and improved living conditions. Presently, many people are struggling and not seeing the benefits,” she said.
An economist, Opeyemi Alabi, described the pace of borrowing as worrisome, noting that frequent loan approvals without a clear long-term strategy could signal fiscal pressure.
“The concern is not just how much Nigeria is borrowing, but how quickly new loans are being approved without a clearly communicated strategy.
“Nigeria’s real challenge is not the size of its debt, but the cost of servicing it relative to government revenue,” he said.
Mr Alabi added that the country could not rely on borrowing to solve its revenue challenges, recommending improved tax collection and reduction of leakages as more sustainable measures.
A financial analyst, Segun Ibikunle, said borrowing could be beneficial if properly managed and tied to productive investments.
“Infrastructure borrowing only makes sense if the project can unlock economic activity that pays back the debt.
“A highway should do more than connect cities; it should generate economic benefits. Otherwise, such loans could become long-term liabilities.”
Mr Ibikunle warned that external loans exposed the economy to exchange rate risks, noting that a weaker naira would increase repayment costs.
(NAN)