Naira depreciation, not fresh borrowing, drove debt surge — Oyedele

The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has told lawmakers that exchange-rate depreciation and accounting adjustments, not extensive new borrowing, account for much of the rise in Nigeria's public debt since this administration took office. He spoke on Monday while briefing the Senate Committee on Finance on the state of the economy.

Exchange rate revaluation added N40 trillion to debt stock

Senator Adamu Aliero raised concerns about claims that the Tinubu administration had borrowed about N80 trillion on top of the roughly N75 trillion inherited. In response, Oyedele cautioned against comparing debt figures without accounting for naira depreciation.

When this administration came into office, public debt was around N75 trillion. Many people simply compare that figure with today's debt stock and conclude that this government has borrowed massively, he said. He explained that Nigeria reports its public debt in naira, so the depreciation of the local currency significantly increased the naira value of external debt. The exchange-rate revaluation alone added more than N40 trillion to the public debt stock.

Securitisation of Ways and Means brought N33 trillion onto official records

Oyedele also pointed to the securitisation of Ways and Means advances inherited from the previous administration, which the National Assembly approved. That exercise brought about N33 trillion in previously existing obligations onto the government's official debt records.

It was not new borrowing; it was simply bringing previously existing obligations onto the official debt books. These factors have not always been properly explained, which is why the reported public debt appears much larger, he said. He added that a significant portion of domestic borrowing has been used to refinance maturing debt, not to accumulate new obligations. Refinancing involves replacing existing debt with new debt to meet repayment obligations and should not be interpreted as additional borrowing.

He maintained that the Tinubu administration has adopted a cautious borrowing strategy focused on financing infrastructure and supporting long-term economic growth while keeping debt levels sustainable. We see debt as leverage. Every naira and every dollar borrowed should generate more value than the amount borrowed, Oyedele noted.

Senators raise concerns over budget implementation

Beyond the debt discussion, senators expressed concern over the slow implementation of the capital component of the 2026 Appropriation Act. Senate Chief Whip Tahir Monguno and Senator Aliero criticised the pace of capital project execution and stressed the need to accelerate implementation.

After a closed-door meeting with the minister and members of the economic management team, Chairman of the Senate Committee on Finance, Sani Musa, assured lawmakers that implementation would improve. He said both the executive and the National Assembly were working to strengthen budget performance, including reviewing the current envelope budgeting approach. The government is considering a transition to a performance- and priority-based budgeting system, alongside reforms to the contractor payment process to improve project delivery.

What this means for the naira and Nigerian businesses

Nigeria's public debt has risen sharply in recent years, reflecting a combination of fiscal deficits, exchange-rate movements and the formal recognition of previously outstanding government liabilities. Following the liberalisation of the foreign exchange market in 2023, the naira depreciated significantly against major international currencies, increasing the naira value of external debt even without equivalent new foreign borrowing. For Nigerian businesses and consumers, the message is clear: the headline debt figure is not the same as fresh government spending, but the cost of servicing that debt remains a real burden on the budget and the economy.