Nigeria’s Rising Debt Driven by Exchange Rate Shifts, Not New Borrowing – Budget Office

Nigeria’s soaring debt figures are largely the result of exchange-rate revaluation of existing foreign-currency obligations rather than fresh borrowing, the Budget Office of the Federation has clarified. The federal government rejected what it described as misrepresentations of the nation’s public finances, noting that many criticisms of President Bola Ahmed Tinubu’s economic reforms conflate revenue, borrowing, and federation-wide collections.

Tanimu Yakubu, Director General of the Budget Office, said much of the public debate on “Tinubunomics” is based on what he called “arithmetic illusion rather than economic analysis.” Speaking on Sunday, Yakubu urged critics to adopt established public finance frameworks to encourage insight over heated speculation in discussions of Nigeria’s fiscal policy.

The government explained that critics often combine tax collections, oil revenue, customs receipts, borrowing, and subsidy savings into massive headline sums—sometimes exceeding N150 trillion—and then question how the money was spent. Yakubu warned that such approaches ignore basic fiscal principles, emphasizing that borrowing is not revenue, and pooled federation-wide collections are not the same as funds the federal government can spend.

On fuel subsidy reform, Yakubu said the policy does not generate instant cash but instead closes fiscal gaps created by underpricing and hidden obligations. He stressed that rising debt figures in naira are largely due to exchange-rate changes on existing dollar-denominated loans, a process often misinterpreted as new borrowing. He also cautioned against double-counting revenues, pointing out that gross oil receipts and customs revenue are frequently misreported in public discourse.

Yakubu concluded that the Tinubu administration is implementing a “macro-fiscal reset” rather than promising immediate abundance, focusing on restoring fiscal discipline, improving revenue management, and ensuring transparency in government spending. He urged analysts to evaluate retained federal revenue, debt service, capital projects, and public infrastructure outputs rather than relying on misleading arithmetic. “Accountability begins with audit logic, not social media arithmetic,” he said.

source: Leadership