Former presidential candidate of the Labour Party, Peter Obi, has raised concerns over Nigeria’s rising debt servicing obligations and what he described as growing pressure on the country’s fiscal space.

In a post on his official X handle on Monday, Obi referenced President Bola Ahmed Tinubu’s recent remark during a foreign tour that Nigeria is projected to spend about $11.6 billion on debt servicing, warning that the figure should worry anyone concerned about the country’s long-term economic stability and development trajectory.

Obi argued that while borrowing is not inherently harmful when prudently managed, its effectiveness depends on how the funds are utilised.

He cited countries such as Japan, the United Kingdom, the United States, the United Arab Emirates, Singapore and Indonesia as examples of economies that maintain high debt levels but channel borrowing into productive sectors including education, healthcare, infrastructure and innovation.

According to him, such investments generate long-term economic returns and enhance repayment capacity, making debt more sustainable despite high levels of indebtedness.

However, he said Nigeria’s case differs significantly, alleging that a large share of past borrowing has been directed toward consumption rather than productive investments, with limited visible developmental outcomes to justify the rising debt profile.

The former Anambra state governor also noted that a substantial portion of the debt currently being serviced was accumulated under the present administration, which he said has continued to borrow at a significant pace.

He listed recent external borrowing commitments to include about $5 billion from First Abu Dhabi Bank in the United Arab Emirates, $1 billion via UK Export Finance through Citibank London, a proposed $1.25 billion facility from the World Bank, and an additional $516 million arranged through Deutsche Bank, bringing recent external loan commitments to approximately $7.8 billion. He added that ongoing domestic bond issuances have further increased the country’s debt stock.

Against this backdrop, Obi referenced Nigeria’s 2026 budget, noting that allocations to health (₦2.46 trillion), education (₦2.56 trillion), and poverty alleviation (₦865 billion) amount to about ₦5.885 trillion combined.

He contrasted this with debt servicing costs estimated at about $11.6 billion (roughly ₦17–₦18 trillion depending on exchange rate assumptions), which he said is nearly three times the combined allocation to the three critical sectors.

According to him, this imbalance reflects a troubling fiscal reality in which debt obligations are increasingly crowding out investments in human capital development and poverty reduction.

The former Labour Party presidential candidate cautioned that even where budgetary allocations exist, full implementation is not always guaranteed, while efficiency and accountability challenges may reduce their impact.