By Blaise Udunze

Findings show that the United States owes more than $36 trillion while Nigeria owes over N159.28 trillion, with external debt now standing at approximately $51.8 billion. At first glance, when comparing the debt profiles of the world’s largest economy and Africa’s largest economy, it may seem misplaced. America can borrow almost indefinitely because it issues the world’s reserve currency. Nigeria cannot. Yet both countries are confronting a similar worry. This has led to asking, when does debt cease to be a tool for development and become a permanent feature of national survival?

The difference is that while America may be testing the limits of how much debt a superpower can carry, Nigeria is testing how much debt a fragile developing economy can sustain before it begins to mortgage its future.

The latest proposal by the federal government to secure another $1.25 billion World Bank facility under the Nigeria Actions for Investment and Jobs Acceleration Programme has once again reignited a debate that refuses to disappear. What appears to be far from the daily lived experience of Nigerians over the years is having government officials insisting that the loan will support investment, expand access to finance, improve electricity, enhance digital services, and create jobs. According to the claims, these are worthy objectives. But Nigerians have heard similar promises before.

The more important question is no longer whether Nigeria should borrow. Virtually every modern economy borrows. The real question which calls for critical concern is what exactly Nigeria is borrowing for, and why the benefits of decades of borrowing remain largely invisible in the everyday lives of millions of citizens. This is where the national conversation becomes uncomfortable.

Funny enough, over the years, successive governments have justified borrowing as a necessary response to development deficits. Yet despite rising debt levels, many Nigerians struggle to identify corresponding improvements in their lived experiences. This justification has kept many wondering as the roads remain dilapidated, public hospitals are overwhelmed, and the electricity supply also remains unreliable. Talk of the public education system, this has continued to deteriorate badly, and unemployment remains stubbornly high. Inflation has eroded incomes, with the cost of cooking gas hitting N2,400 per kg, while businesses struggle under the weight of high operating costs.

If borrowing is supposed to finance development, where is the development? The concern becomes even more urgent and highly alarming when viewed against the backdrop of Nigeria’s worsening fiscal position. According to the Debt Management Office, public debt has climbed to over N159 trillion. With this outrageous figure, more troubling is the fact that debt servicing now consumes an alarming share of government revenue, which has continued to cripple economic growth and compromise the future. This development caught the attention of the Nigerian Economic Summit Group, as it recently noted that Nigeria’s debt-service-to-revenue ratio remains among the highest in the world. In simple and practical terms, this implies that the government is spending an increasingly large portion of what it earns paying creditors rather than investing in infrastructure, healthcare, education, security, or economic expansion.

This is the hallmark of a debt trap. The danger is not necessarily that Nigeria will default tomorrow. The danger is that the nation becomes trapped in a vicious cycle where governments borrow to finance deficits, then borrow again to service existing obligations, and then borrow even more to cover the consequences of previous borrowing. That cycle is already becoming visible.

Come to think of it, President Bola Tinubu’s administration has boldly defended borrowing as necessary to support reforms, cushion economic shocks, and stimulate growth. Yet critics have continued to point to the fact that since May 2023, borrowing has accelerated significantly.

According to economic analyst Dele Oye, the current administration has added approximately N65.9 trillion to Nigeria’s debt stock within just two years, a figure that exceeds several multiples of what Nigeria accumulated during its first five decades after independence.

Whether one agrees with the politics surrounding that claim is secondary. The underlying concern remains valid since debt is growing far faster than the visible capacity of the economy to generate sustainable revenue. This is why comparisons with the United States are useful.

America’s debt is enormous, but debt sustainability is not determined by the size of debt alone. It is determined by economic productivity. The United States supports its debt burden through a diversified economy, deep capital markets, technological innovation, globally competitive corporations, advanced research institutions, and an unmatched ability to attract global investment.

Debt is not what sustains America. Productivity does. Unlike Nigeria, it continues to rely heavily on crude oil revenues, a narrow tax base, volatile foreign exchange earnings, and a fragile manufacturing sector. The critical difference is that every dollar borrowed by Nigeria therefore carries greater risks than every dollar borrowed by the United States.

When America borrows, it borrows largely in its own currency. When Nigeria borrows externally, it exposes itself to exchange-rate risks that can dramatically increase repayment costs whenever the naira weakens, as this calls for utmost caution. Every currency depreciation effectively inflates the burden of external obligations. What appears manageable today can become overwhelming tomorrow. This reality makes Nigeria’s current debt trajectory particularly concerning, which is the truth.

The World Bank itself has raised concerns about governance risks and structural weaknesses within Nigeria’s fiscal architecture. Even more troubling are recent revelations indicating that more than N34.5 trillion was reportedly deducted through pre-distribution mechanisms before revenues reached the Federation Account between 2023 and 2025. According to the findings, approximately 41 per cent of government revenues were removed as first-line charges before distribution.

Whichever way it is viewed, perhaps as fiscal leakages, weak oversight, or institutional inefficiency, the implications are profound and of critical concern. If we must begin to tell ourselves the factual truth, a nation cannot continue borrowing aggressively while simultaneously failing to maximise the value of revenues it already generates.

This brings us to the central question confronting Nigeria today. The point is, are these loans building future productive capacity, or are they merely financing continuity?

Borrowing can be justified when it funds projects that expand economic output. Investments in power generation, transport infrastructure, agriculture, industrialisation, technology, and education can create long-term growth that eventually pays for the debt itself. In such cases, debt becomes a bridge to prosperity.

But it must be known that borrowing to fund recurrent expenditure, sustain bloated government structures, finance consumption, cover inefficiencies, or service previous debts transforms borrowing into a treadmill. The irony here is that the country runs harder every year but remains trapped in the same place. Unfortunately, much of Nigeria’s fiscal reality increasingly resembles the latter.

The tragedy is that this debt burden is not abstract. It is already affecting ordinary Nigerians. The adverse implication and critical point are that every naira directed toward debt servicing is a naira unavailable for schools, hospitals, security, electricity, or social protection. Every external loan increases future repayment obligations. Every missed opportunity to invest borrowed funds productively transfers today’s policy failures to future generations.

The consequences are visible everywhere. Businesses face prohibitively high borrowing costs. Today in Nigeria, it is no longer news that manufacturers struggle with energy expenses, which adversely affect the citizens. The same applies to youth unemployment, which remains widespread. Also, infrastructure deficits persist. Another critical issue is that states remain heavily dependent on monthly allocations from the federal level. With the developments, economic growth remains too weak to significantly improve living standards.

The result is a contradiction in which debt rises while prosperity stagnates. This is perhaps the greatest lesson Nigeria must learn from America’s debt experience.

The debate should not focus exclusively on how much debt a nation carries. The more important progressive question is whether the economy is productive enough to sustain that debt.

What every Nigerian should know is that Nigeria as a country cannot borrow its way to prosperity because it must first strengthen the foundations that generate sustainable growth. With the lingering challenging surrounding the borrowing and the mountain of debts, one key fact is that it cannot rely indefinitely on external creditors while neglecting domestic productivity. Also, it cannot continue to depend on oil revenues while failing to broaden its tax base. Another loose end that has been a critical matter is that it cannot expect debt-financed development without strong institutions, transparency, accountability and effective project execution.

The solutions are neither mysterious nor impossible. This entails that Nigeria must aggressively expand domestic revenue mobilisation without suffocating businesses and ensure it digitises tax administration, eliminates leakages, enforce fiscal responsibility laws. Also, it must reduce the cost of governance, strengthen public procurement systems, while ensuring that every borrowed naira and kobo is linked to measurable economic outcomes.

Equally important, the government must rebuild public trust. The truth is that citizens are more willing to support reforms when they can see tangible results. Some of the developments in the past that have continued to erode public trust are when subsidy savings are announced, people expect better roads, improved healthcare, reliable electricity, and enhanced security. When new loans are obtained, they expect visible projects and measurable returns, but the reverse has been the case. Those at the helm of affairs of this country must understand that transparency is not merely good governance; it is an economic necessity. History offers a warning.

In 2006, under the leadership of Olusegun Obasanjo, Nigeria celebrated its exit from the Paris Club debt burden after securing one of Africa’s most significant debt relief achievements. Not too long but for a brief period, the country stood relatively free from the crushing obligations that had constrained development for decades. Two decades later, that achievement appears increasingly distant.

The danger is not simply that Nigeria is borrowing. The danger is that borrowing is becoming normalised as a substitute for difficult reforms.

A nation can borrow to build industries or borrow to pay bills. It can borrow to create future wealth or borrow to postpone present challenges. One path expands prosperity; the other compounds dependency.

America’s debt mountain demonstrates that even wealthy nations are not immune to the consequences of structural borrowing. Nigeria’s debt burden demonstrates how much more dangerous that reality becomes when economic productivity fails to keep pace. Borrowing can buy time. It cannot buy prosperity.

Sooner or later, every nation must generate the economic value necessary to justify the debts it accumulates. Nigeria’s future will depend not on how much it can borrow, but on how effectively it can produce, innovate, industrialise, and grow.

That is the lesson hidden underneath America’s debt mountain. It is also the lesson Nigeria ignores at its own peril.

Blaise, a journalist and PR professional, writes from Lagos and can be reached via: bl***********@***il.com

By Osasikemwen Ighile

In today’s volatile economic climate, saving money is no longer just a prudent habit—it is a strategic necessity.  The constantly rising living costs, inflationary pressures, and currency fluctuations have redefined what it means to be financially secure. The difference now lies not in whether people save, but in how they save.

Reports from the National Bureau of Statistics (NBS) highlight this shift, showing inflation in Nigeria climbing from 22.41% in May 2023 to a peak of 34.80% by late 2024. While temporary cooling occurred in early 2025, the overarching trend underscores a stark reality – cash that isn’t generating interest is rapidly losing its purchasing power.

For many Nigerians, the instinct to put money aside remains strong, but without structure and strategy, those savings often fail to deliver real value and results. Money kept idle may offer liquidity and accessibility, but may not preserve value effectively over time.  To achieve financial growth, saving must evolve from passive storage to intentional planning.

For generations, informal saving methods such as keeping cash at home or participating in contribution schemes like ajo or esusu have served as accessible financial tools. While these systems encourage discipline and community trust, they come with clear limitations in a modern economy. Physical cash steadily loses value due to inflation, meaning what seems sufficient today may purchase far less in the near future. Easy access to such funds also increases the likelihood of impulsive spending, weakening long-term financial discipline. More importantly, money kept outside formal financial systems does not grow. It earns no interest, gains no value, and misses the compounding effect that drives wealth accumulation. Contribution schemes, while helpful for short-term goals, are often rigid and do not generate returns—they help rotate money, but not multiply it.

To build and maintain a meaningful financial backbone, savings must be aligned with purpose. An emergency fund, for instance, remains the foundation of financial stability, but leaving it in low-yield accounts limits its potential. Placing such funds in flexible savings options that offer daily interest based on the terms and conditions allows individuals to manage access while still earning modest returns. For funds that are not immediately needed, fixed savings or deposits provide a stronger pathway to growth.

By committing money for a defined period in interest-bearing savings accounts, savers can benefit from interest rates that may assist in preserving value over time, subject to prevailing economic conditions, while also reducing the temptation to spend impulsively. Many individuals report that setting clear savings goals and maintaining disciplined saving habits can improve confidence in managing personal finances.

Saving with clear goals further strengthens financial discipline. When individuals align their savings with specific needs such as rent, education, or business capital, and automate contributions, they remove the uncertainty and inconsistency that often derail financial plans. Over time, this approach builds both confidence and stability.

The difference between merely saving money and actually growing it becomes more evident over time. Funds placed in interest-bearing accounts benefit from compounding and gradually increase in value, while idle cash continues to lose purchasing power. What appears safe on the surface may, in reality, be diminishing.

The emergence of tech-enabled financial platforms like FairMoney has made structured saving more accessible, offering individuals secure and transparent ways to save and manage their funds. FairMoney MFB operates under the oversight of the Central Bank of Nigeria (CBN) and is insured by the Nigeria Deposit Insurance Corporation (NDIC), subject to applicable coverage, limited and regulatory conditions, providing an added layer of confidence.

Ultimately, financial security is not determined solely by income but by how effectively available resources are managed and grown. Intentional saving is about making money work with clarity, discipline, and purpose. In an uncertain economic environment, that shift from simply keeping money to adopting a structured savings approach can form an important component of long-term financial planning.

Osasikemwen Ighile is the Brand Manager for FairMoney Microfinance Bank

By Mannir U. Ringim (PhD)

Long before the satellite forecasts and the seasonal advisories, the African farmer learned to read the sky. He watched the colour of the clouds, the behaviour of the birds, the first scent of rain on hot ground, and he planted accordingly. For generations, that knowledge was reliable enough to feed nations. Today, it is faltering not because the farmer has forgotten how to read the signs, but because the signs themselves have changed. The rains that once came in April now arrive in May, or not at all. The harmattan lingers. The river that once flooded every decade now floods twice in five years. Nature is still sending its signals; they have become harder and crueller to read.

Today, the world marks World Environment Day. This year’s theme, “Inspired by Nature. For Climate. For Our Future,” will be examined in Baku and echoed in boardrooms and headlines across the world. It is a worthy conversation, but the people who live that theme most literally will not be in any of those rooms. They are the smallholder farmers of northern Nigeria and the wider Sahel, the rice growers of the Niger basin, the cassava, cocoa, and oil palm households from Cross River to the forests of the coast. It is a Nigerian story, but not only a Nigerian one: the same signals are being read across West Africa, and in the last decade, the reading has grown harder.

I want to make a single argument on this day of World Environment Day, and although it begins in the field, it ends in the boardroom: in our part of the world, agricultural finance is climate finance. The most direct, most local and most consequential form of climate action available to the region’s financial sector is not a distant carbon market or an offset scheme negotiated abroad. It is the decision to put serious, patient and intelligent capital into the hands of the people working the most climate-exposed asset we possess — our land. Get that decision right, and we address food security, rural livelihoods and climate resilience in a single motion. Get it wrong, and we will keep treating three faces of one crisis as though they were unrelated problems.

The signals from the land

To understand why this matters, it helps to travel the land as those of us in business banking do. Across the Sahel, the desert is not a metaphor; it advances year upon year over farmland that fed families in living memory. Lake Chad — once one of Africa’s great freshwater bodies, shared by Nigeria, Niger, Chad and Cameroon — has retreated to a fraction of its former size, carrying fishing and farming livelihoods with it. In the middle belts, the rains have turned violent and unpredictable, and a single night of flooding can erase a season’s labour and a year’s income. Along the coast and the eroding river valleys, gully after gully swallows farms, homes and roads. These are not isolated misfortunes; they are the local expressions of a global phenomenon, and the people absorbing them first are the people who feed everyone else.

This is the part of the climate story we too often misfile. We log the late rains under “agriculture,” the flood under “disaster relief,” the rising cost of a meal under “the economy,” and we reserve the word “environment” for tree-planting campaigns. But these are not separate ledgers. The farmer who cannot plant because the rains failed, the trader who charges more because the harvest shrank, the young person who leaves the village because the farm no longer pays — all are responding to the same signal. In our region, climate change announces itself first as an agricultural event. We will not manage it as an environmental one until we are willing to finance it as an economic one.

A paradox of capital

Here lies a contradiction we have tolerated for far too long. Agriculture employs more people than any other sector in Nigeria and across much of West Africa, and contributes a substantial share of national output. By any honest measure, it is the foundation of the real economy, and yet, for decades, it has drawn only a single-digit share of total bank lending, which is a fraction of its weight in jobs, in food, and in stability. We have built financial systems that are, in effect, under-invested in the very sector that sustains them.

The reasons are familiar to every banker. Agriculture has long been judged too risky, too seasonal, too informal and too hard to collateralise. A farmer’s income arrives once or twice a year, not monthly; his balance sheet consists of a few hectares, some livestock, and a great deal of practical knowledge. No conventional credit model was built to value it. So, capital did the rational short-term thing: it stayed away, or lent briefly and expensively, on terms that suited the lender’s calendar rather than the crop’s. That caution made sense in a stable climate. In a changing one, it is self-defeating because the farmer who cannot borrow cannot adapt. He cannot buy the drought-tolerant seed, install the modest irrigation that frees him from relying on a single rainy season, or afford the storage that keeps a good harvest from spoiling before the market. We have been asking our most climate-exposed citizens to face the hardest conditions in memory with the least capital available to them. That is not prudence; it is a slow failure of both economics and adaptation, and the bill arrives at every table as more expensive food.

Risk is also a design problem

If there is good news here, it is that much of what we call “agricultural risk” is not a law of nature. It is a design problem, and design problems can be solved. The past few years have produced a genuinely more sophisticated toolkit, and the institutions willing to use it are finding the sector far more bankable than the old assumptions allowed. It begins with lending that fits the farmer rather than forcing the farmer to fit the facility: cash-flow facilities structured around the crop cycle, disbursing at planting and falling due after harvest. Value-chain and anchor-borrower models, in which a credible off-taker sits between the bank and thousands of smallholders, solve the scale, collateral, and market access problems at a single stroke. Warehouse-receipt systems let stored grain serve as collateral, so a farmer need not sell everything at harvest, when prices are lowest, merely to raise cash.

Around that core sits an expanding set of instruments: input and mechanisation finance to lift yields; irrigation finance to break the dependence on the rains; cold-chain and storage finance to attack the staggering share of what we grow that is still lost after harvest, losses that are, in their own quiet way, as much an environmental cost as an economic one, since every wasted tonne is water, land, fuel and labour spent for nothing. Weather-index insurance can pay out automatically when rainfall falls below a threshold, turning an uninsurable risk into a priced one, and the spread of mobile technology and farm-level data — satellite imagery, mapping, digital payment histories — is finally giving lenders an evidence-based way to assess the smallholder they once treated as invisible. None of this is theoretical; each instrument is already in use somewhere in the region today. The task is not to invent new tools but to deploy the existing ones at scale, and with discipline.

Here, agricultural finance and the climate agenda converge, because the instruments that make farming bankable are, almost without exception, the ones that make it resilient. Irrigation is an adaptation. Drought-tolerant seed is an adaptation. Healthier soils, smarter water use, agroforestry that holds back the desert, storage that wastes less — these are not optional “green” extras; they are the difference between a farm that survives a harsher climate and one that does not. The point lands with particular force in West Africa, among the most climate-vulnerable yet least climate-financed regions on earth. The global conversation has turned decisively to climate finance — Azerbaijan, this year’s World Environment Day host, carried that agenda as president of COP29 — but climate finance is not only something that happens at altitude. Its most grounded form, for us, is the facility that enables a cooperative to drill a borehole or build a warehouse. The local reality is how the global ambition gets delivered.

Shared risk, shared frontier

None of this can rest on the banks alone, and it should not. The risks are real, and the most durable way to manage them is to share them among the actors who each hold a piece of the solution. Governments set the frameworks, build rural infrastructure, and provide the guarantees that make long-tenor lending viable. Development finance institutions, the African Development Bank chief among them, with their long-standing ambition to feed the continent, bring the patient, blended capital that crowds in commercial lenders rather than out. Insurers price the weather risk that banks should not carry alone. Agritech firms and aggregators supply data and market linkages. Banks bring structure, reach, governance and capital. Nigeria has tried versions of this before — the Agricultural Credit Guarantee Scheme and the Anchor Borrowers’ Programme among them, and the experience taught us both the promise of public-private agricultural finance and the discipline it demands: such partnerships work only when they are designed with rigour, governed transparently, and judged by outcomes rather than by money disbursed.

For those of us whose responsibilities include the public sector, the most valuable role a bank can play is often not as lender of last resort but as honest broker, aligning the ambitions of government, the capital of development partners, and the needs of the farmer into structures that actually move money to the field, and the prize is larger than risk management. It is tempting, faced with advancing desert and shrinking water, to speak of the Sahel and the rural North only in the language of crisis. However, that language is incomplete and self-fulfilling. The same regions hold vast arable land, established value chains in grains, livestock and horticulture, and one of the youngest workforces on earth. When a young person can finance an irrigated dry-season crop, or a women’s cooperative can secure inputs and a guaranteed buyer, agriculture stops being a fallback and becomes a future. That shift — from relief to investment, from managing decline to financing growth — is the single most powerful contribution finance can make to the regions on the climate front line. It is also good business: the young and the underserved are not a market to be pitied, but the largest growth opportunity in African banking.

Where we choose to stand

At Union Bank, this is not a new conviction. An institution that has banked Nigerian communities for more than a century has watched the relationship between people and land change in real time and has come to regard agricultural finance not as a niche or an act of charity, but as national infrastructure — and, increasingly, as climate infrastructure. The question we put to ourselves is not whether agriculture is worth financing, but how to finance it in a way that builds resilience rather than extends credit, and how to do so at the scale the moment now demands.

The campaign behind this year’s World Environment Day speaks of the signals the Earth is sending us, and the signals we choose to send back. It is an apt frame for a banker. For too long, the signal our financial system sent the farmer was a quiet, discouraging one: you are too risky, too small, too far away to be worth our capital. The farmer heard it clearly, and many of his children left the land. We can now send a different signal.

“For Climate” and “For Our Future” are not phrases to be admired from a distance. For Nigeria and its neighbours, there are decisions to be made at home in how we price risk, where we direct capital, and whether we are finally willing to stand behind the people who have been reading nature’s signals all along. The most meaningful climate commitment our financial sector can make this World Environment Day is not a statement; it is a willingness to finance the land that feeds us, intelligently and at scale. The moment, as the campaign rightly insists, is now. Now for climate — and, just as urgently, now for the farmer.

Mannir U. Ringim is Executive Director, Business Banking at Union Bank of Nigeria, with responsibility for the Public Sector and the Bank’s Northern, South-South and South-East businesses.

He is versatile in spearheading new business development, cultivating partnerships,
and fostering healthy stakeholder relationships, with a focus on driving business growth and achieving revenue milestones.

Mannir’s educational qualifications include a PhD in Economics (focus on Financial Inclusion) from Bayero University, Kano, and Bachelor of Science and Master of Science degrees in Economics from the same institution. He also holds executive certifications from INSEAD Business School in Singapore, Kellogg School of Management in Chicago, and Euromoney in London, reflecting his dedication to continuous growth and excellence. Mannir has been an Honorary Senior Member of the Chartered Institute of Bankers of Nigeria (HCIB) since 2015.