Oyedele faults critics of government borrowing

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The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has faulted Nigerians, especially analysts and commentators, for attacking government borrowing without considering the purpose, cost and expected return on such debt.

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Oyedele spoke in Abuja on Tuesday at the Fellowship Award Ceremony and 2nd Biennial Conference of the Capital Market Academics of Nigeria.

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He said, “When analysts go on TV and join the populist view to accuse the government of borrowing, you are doing a disservice. The relevant question is never simply how much debt. It is always debt for what and what cost, against what return, and repaid on what terms?

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“A nation, a state, or a business that borrows to finance a productive asset generating returns above the cost of that capital is not behaving recklessly; it is behaving rationally.”

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The minister, who delivered a lecture titled, “Rethinking Capital Mobilisation for National Development: Why Should Capital Choose Nigeria,” said Nigeria’s negative perception of debt had become a cultural barrier to economic growth.

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PUNCH Online recently reported that Nigeria’s total public debt increased to N159.28tn as of 31 December 2025, driven by fresh domestic and external borrowings, according to data released by the Debt Management Office.

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The figure showed a quarter-on-quarter increase of N5.98tn, or 3.9 per cent, from N153.29tn recorded at the end of September 2025, and a year-on-year rise of N14.61tn, or 10.1 per cent, from N144.67tn as of 31 December 2024. According to the minister, debt is often wrongly treated in public discourse as a moral failing rather than a financial instrument.

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“In most of our public discourse, debt is spoken of as a moral failing rather than a financial instrument. People go to churches and mosques to pray that they may never be in debt. A government that borrows is accused of mortgaging the future,” he said.

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Oyedele added that businesses and individuals were also wrongly judged for using credit to finance expansion, noting that such attitudes were rooted in Nigeria’s history of debt distress but should not be mistaken for sound finance principles.

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He said, “An instinct formed by historical trauma is not the same as a sound principle of modern finance. Indeed, refusing to borrow under such conditions is itself a missed opportunity, a form of economic conservatism that quietly forfeits growth.”

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The minister also criticised the preference of many Nigerian entrepreneurs for sole ownership of small businesses instead of shared ownership structures that could help them scale. He said, “The desire to own 100 per cent of a small business will always lose, in absolute terms, to owning a meaningful share of a large one. Equity is not a loss of control. It is, properly structured, a multiplication of capacity. Debt is not a confession of weakness. If properly priced, it is a tool of acceleration.”

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Oyedele said Nigeria needed to build a stronger financial culture by teaching businesses and citizens how to use debt, equity, private capital, venture capital and public listings to expand productive capacity.

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He warned that capital was highly mobile, impatient, intelligent, competitive and unforgiving, adding that any country seeking investment must offer trust, policy consistency, liquidity, credible institutions and enforceable contracts. The minister said investors worried more about uncertainty than taxation, citing policy reversals, regulatory inconsistency, weak contract enforcement and foreign exchange uncertainty as major deterrents to investment.

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He also proposed the establishment of a dedicated commercial dispute resolution tribunal to improve investor confidence and reduce delays in resolving business disputes. According to him, some commercial disputes in Nigeria can take an average of about 15 years to move through the High Court, Court of Appeal and Supreme Court, a timeline he said no rational investor could underwrite.

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“I therefore propose the establishment of a dedicated commercial dispute resolution tribunal, distinct from and complementary to our existing investment tribunal architecture,” he said.

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He said such a tribunal should be staffed by judges and arbitrators with commercial, financial and capital market expertise, bound by strict statutory timelines and supported by digital filing and modern case management systems.

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Oyedele also said Nigeria must confront what he called a “prejudice premium” paid by African countries in global debt markets, noting that Nigeria had about $`18.5bn in Eurobond portfolio and paid double-digit coupons despite never defaulting.

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“We have never defaulted. So the sovereign spread between how much Nigeria pays and how much the US pays is just the default risk, and we have never defaulted. And we are paying so much spread,” he said.

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He proposed the creation of a national risk market to price and distribute political risk, climate risk, agricultural risk, infrastructure guarantees, policy continuity insurance, export guarantees and credit enhancement instruments.

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The minister also challenged capital market stakeholders to build a `$1tn capital market within 10 years, saying the Nigerian Exchange had shown that such growth was possible.

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He said the NGX equity market capitalisation rose from about N62.8tn at the start of 2025 to over N99tn by year-end and surpassed N129tn in the first quarter of 2026, adding that even after a recent correction, it remained close to N150tn.

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“If South Africa can build a capital market of that scale, if India can, if Saudi Arabia can, if Indonesia can, why not Nigeria?” he said.

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He also called for the democratisation of ownership, saying every Nigerian graduate should leave university with an active investment account, while cooperative societies and market women should be able to invest in productive assets through regulated vehicles.

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On small business financing, Oyedele said banks and government alone could not meet the needs of Nigerian MSMEs, calling for SME exchanges, private placements, crowdfunding platforms, revenue-based finance, venture capital, angel investor networks, municipal finance instruments and local investment funds.

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He said some small businesses paid between five and 10 per cent interest monthly from informal lenders, which he described as “triple digits in a year.”

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He added that recent industry surveys estimated Nigeria’s MSME financing gap at over $200bn.

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The Director-General of the Securities and Exchange Commission, Dr Emomotimi Agama, in his goodwill message, said Nigeria’s capital market was undergoing historic reforms anchored on the Investments and Securities Act of 2025 and a new 10-year master plan.

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Agama said, “Good regulation begins with good thinking. The policies we make at the Securities and Exchange Commission are only ever as strong as the evidence and the ideas that inform them.”

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He said the SEC regarded the academic community as partners, not observers, adding that scholarship and regulation must work together to make markets “fairer, deeper, and safer for the Nigerians we both serve.”

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The President of CMAN, Prof Uche Uwaleke, called for stronger collaboration between academia, regulators, government and the financial services industry.

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Uwaleke said CMAN was established to serve as Nigeria’s leading financial markets think tank, with a mandate to translate academic knowledge into practical solutions for the economy.

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“Nigeria needs a stronger handshake between academia and the financial services industry,” he said.

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He urged the Federal Ministry of Education and the National Universities Commission to encourage universities to value industry experience alongside academic publications, especially in banking, finance, insurance, accounting and capital market studies.

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