Borrowing Without Growth: Nigeria’s Debt Dilemma

Recent World Bank reports indicate that Nigeria is now its number 3 debtor, with obligations estimated at roughly $18.7 billion. Bangladesh is the number one with $23 billion.
I continue to emphasise that there’s nothing inherently wrong with borrowing. Nations borrow to improve productivity and stimulate growth. Debt becomes a problem only when it finances consumption, inefficiency, or corruption rather than investment as is our own case.

To understand the difference, it is useful to compare outcomes. Around 2015, Bangladesh’s nominal GDP stood at roughly $195 billion, with per-capita income slightly above $1,235. By 2024–2025, its economy had expanded to roughly $460–500 billion, and per-capita income had risen to about $2,700. In a decade, Bangladesh more than doubled the size of its economy, lifted incomes, and strengthened its export base – evidence that borrowed resources were largely channelled into productive sectors such as manufacturing, textiles, energy, and human capital.

Nigeria’s trajectory over the same period tells a different story. In 2015, Nigeria’s GDP was about $490 billion, with per-capita income around $2,600–2,700. Today, due to weak productivity growth, currency instability, structural inefficiencies, and monumental corruption, Nigeria’s GDP is below about $250 billion, with a per-capita income of $850-1000. Instead of expanding as is the case with Bangladesh, the economy has effectively contracted.
The contrast is instructive. One country borrowed and expanded production, exports, and incomes.

The other borrowed but saw declining economic strength and living standards. This suggests that the real issue is not the size of borrowing, but the use of borrowed funds. Debt tied to infrastructure, industry, and human development fuels growth. Debt tied to consumption, leakages, and corruption deepens stagnation.

A new Nigeria where loans, if taken, will translate into productivity instead of consumption is very much POssible. -PO