Oyedele to Senate: Naira devaluation drove debt figures, not fresh borrowing

MINISTER of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, has said that the jump in Nigeria’s public debt was largely driven by the depreciation of the naira and accounting adjustments rather than fresh borrowing by President Bola Tinubu’s administration.

Oyedele made the clarification on Monday while briefing the Senate Committee on Finance on the state of the economy. He was responding to concerns raised by Senator Adamu Aliero (Kebbi Central), who questioned reports suggesting that the current administration had borrowed about N80 trillion in addition to the N75 trillion debt it inherited.

According to Oyedele, comparing the country’s debt stock at the beginning of the administration with its current level without factoring in exchange rate movements creates a misleading impression. He explained that because Nigeria reports its public debt in naira, the steep depreciation of the local currency significantly increased the naira value of the country’s external debt.

“When this administration came into office, public debt stood at about N75 trillion. Many people simply compare that figure with today’s debt stock and conclude that this government has borrowed massively,” he said.

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“Following the exchange rate reforms and the depreciation of the naira, the foreign currency component of our debt had to be revalued in naira terms. That accounting adjustment alone added more than N40 trillion to the public debt.”

He also identified the securitisation of the Ways and Means advances inherited from the previous administration as another major contributor to the increase in the debt stock. Oyedele argued that the exercise, approved by the National Assembly, added about N33 trillion to the official debt figures but did not amount to fresh borrowing.

“It simply brought existing obligations onto the government’s official debt books. It was not new borrowing,” he said, adding that the failure to properly explain these adjustments had fuelled the perception that the administration had accumulated far more debt than it actually had.

Oyedele explained that much of the government’s domestic borrowing had been used to refinance maturing obligations rather than increase the country’s debt burden.

He noted that the Tinubu administration had adopted a prudent borrowing strategy focused on infrastructure development and long-term economic growth, stressing that every naira or dollar borrowed should create greater economic value while keeping public debt sustainable.

During the session, Senate Chief Whip Tahir Monguno and Senator Aliero criticised the slow implementation of the capital component of the 2026 budget, with Monguno describing the delays as a serious failure of governance.

Responding after a closed-door meeting with Oyedele and members of the economic management team, Chairman of the Senate Committee on Finance, Senator Sani Musa, assured lawmakers that implementation of the capital budget would soon improve.

Musa said the executive and the legislature were working on reforms that would replace the current envelope budgeting system with a performance- and priority-based model, while also considering a return to the previous contractor payment system to speed up project execution.