No generational wealth, just generational gbese
Nigeria is now the third most indebted country in Africa
Good morning, Big Brains. Japa class of 2025 don’t even know what the Lord has done for them because Nigeria is in its deepest financial mess yet, and we’re all collateral damage.
- Margaret
Word count: ~ 1, 000
Reading time ~ 5 mins
Let’s get into today’s edition
Nigeria is the third most indebted country in Africa
Reps are talking about new state creation… again
The Big Deal
Nigeria is the third most indebted country in Africa
Nigeria is topping global charts again, but it’s not for the reasons you think. The African Export-Import Bank (Afrimex) recently released a report about Africa’s debt outlook, and yours truly is Africa's third most indebted country.
According to Afrimex, Nigeria and nine other African countries owe so much money outside the continent that they are responsible for almost 70% of Africa’s total foreign debt. South Africa owes the most (14%), followed by Egypt (13%) and then Nigeria (8%).
Why do we owe so much? Simple—Nigeria doesn’t make enough money to cover its expenses, so the government borrows to keep up. They take loans to build roads, bridges, and other infrastructure and cover the budget gaps. One way they do this is by selling something called Eurobonds, which is basically Nigeria borrowing money from international investors with a promise to pay back with interest.
Afrimex’s report tried to keep things cute by saying that Africa’s overall debt burden might reduce a little by 2028 and that if Nigeria manages its finances better, things could improve. It also suggests that Nigeria should stop relying so much on oil, find other ways to make money (like manufacturing and agriculture) and negotiate better debt repayment deals like some other countries have.
But for now? We’re still deep in debt, and if things don’t improve, we may have to keep borrowing to pay off old loans, which is like using one loan app to pay off another.
Why is this a big deal?
Nigeria has been playing a stupid game with debts for decades, and it's been getting stupid results. In 2021 the country spent 83.2% of its revenue on debt servicing. In 2022, that figure went up to 96.3%. Later, in 2023, the World Bank proposed a solution to reduce Nigeria’s financial burden — removing fuel subsidies. President Tinubu took office and made that his first assignment. We still can’t tell if the subsidy removal achieved anything because, in 2023, Nigeria spent more than 121% of what it spent on servicing debts in 2022.
In 2024, Nigeria's debt struggles got worse. Between January and September 2023, the government used $2.56 billion to repay loans. But in the same period in 2024, that amount jumped to $3.58 billion—almost 40% more. This means Nigeria is struggling even more to keep up with debt payments, and it’s taking a bigger percentage of the country’s money that could have been used for other things like schools, hospitals, and roads. In 2024, about 32.7% of the national budget was set aside to repay loans. In the 2025 budget, we’re following a similar pattern.
At this point, it feels like Nigeria unlocks a new level of chronic debt every year, making the dream of cutting down on the cost of debt servicing look more unrealistic by the day. Unfortunately, citizens are the ones feeling the heat because instead of cutting down on government expenses, our leaders are focused on finding new ways to squeeze money from our pockets. We’ve seen this play out through a series of policies, levies, and taxes—from the controversial cybersecurity levy to increased VAT and telecom tax proposals— to put more money in the government’s pocket.
Every naira used to pay debts is money that won’t be spent on education, healthcare, or fixing bad roads. If this cycle continues, the country will keep borrowing to pay back old loans, and we’ll keep celebrating an inflation rate that’s only dropping on paper.
Reps are talking about new state creation… again
If you were starting to forget the chances of Nigeria getting 31 new states, Nigerian lawmakers would like to remind you of the proposal’s existence this fine morning. They’ve graciously extended the deadline for more state proposal submissions, and they’d like you to know the date has moved from March 5 to March 26, 2025.
Spokesperson of the House of Representatives, Akin Rotimi says this extension is “due to public demand.” He did not specify whether that public demand was from regular Nigerians who have decided that 36 states are no longer enough or just a few well-connected lobbyists. But what’s clear is that the House of Representatives is determined to keep the conversation going.
In case you missed it, Deputy Speaker of the House of Representatives Benjamin Kalu started the conversation when he read the list of proposed states last month and clarified that the proposal was from well-meaning Nigerians, not the House of Representatives.
Despite the controversies surrounding these proposals, the House wants everyone to know they’re committed to a “transparent and constitutionally guided process.”
With all the administrative costs, funding struggles, and governance inefficiencies Nigeria is already dealing with, we’re not sure why this is even a thing. The people proposing it believe it will bring the government closer to the people, but if that’s the only ROI, we can’t honestly call it a worthy investment
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This Week’s Big Question
“If you could say anything to President Tinubu today, what would you say?”
Bimpe’s response - “I just want to ask him if he still knows what he’s doing because I was rooting for him.”
You can also share your response here, and if it’s as interesting as Bimpe’s, we’ll feature it in the next edition.
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