The former Governor of Anambra State, Mr. Peter Obi, has questioned Nigeria’s use of borrowed funds, stating that loans should be used to build industry for economic development rather than fund consumption.
Obi cited recent World Bank reports indicating that Nigeria is now the World Bank’s third-largest debtor, with obligations estimated at roughly $18.7 billion, while Bangladesh ranks first with about $23 billion.
The 2023 presidential candidate of the Labour Party (LP) acknowledged that there is nothing inherently wrong with borrowing, explaining that 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,” he stated.
Obi compared Nigeria with Bangladesh, recalling that 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,” he said.
However, Obi noted that in 2015, Nigeria’s GDP was about $490 billion, with per-capita income around $2,600–$2,700.
He argued that due to weak productivity growth, currency instability, structural inefficiencies, and monumental corruption, Nigeria’s GDP is currently below about $250 billion, with a per-capita income between $850 and $1000. “Instead of expanding as is the case with Bangladesh, the economy has effectively contracted.”
Obi described the contrast as instructive, pointing out that one country borrowed and expanded production, exports, and incomes, while the other borrowed but experienced declining economic strength and living standards.
This, he said, suggests that the real issue is not the size of borrowing, but how the funds are used.
He added that while debt tied to infrastructure, industry, and human development fuels growth, debt tied to consumption, leakages, and corruption deepens stagnation.
