Tinubu celebrates economic growth but ajaero asks: why is Nigeria still borrowing when oil sells above $100?
President Bola Ahmed Tinubu’s latest defence of Nigeria’s economic performance and continued foreign borrowing has sparked fresh questions from the Nigeria Labour Congress (NLC), with its President, Joe Ajaero, demanding explanations for the government’s decision to seek additional loans despite claims of increased revenue following the removal of petrol subsidies.
The disagreement comes amid renewed scrutiny of the Federal Government’s borrowing plans, particularly as Nigerians continue to grapple with the cost of living, rising economic pressures and concerns over the country’s growing debt obligations.
In a communication to the House of Representatives, Tinubu highlighted improvements in key economic indicators, including Nigeria’s 4.43 per cent Gross Domestic Product (GDP) growth in the second quarter of 2026 and a decline in headline inflation to 14.63 per cent in September 2026.
According to the President, the figures demonstrate progress under his administration’s economic reform programme, which includes the removal of petrol subsidies, foreign exchange reforms, tax reforms and measures aimed at improving government revenue.
Nigeria’s 4.43 per cent GDP growth was confirmed by the National Bureau of Statistics (NBS), representing an improvement from the 3.89 per cent recorded in the first quarter of 2026. The expansion was supported by stronger performances in both the oil and non-oil sectors.
However, the President also acknowledged the enormous pressure debt servicing continues to place on public finances, revealing that approximately 65 per cent of government revenue was consumed by debt servicing in the first half of 2026.
This admission has further intensified concerns about whether Nigeria is borrowing beyond its financial capacity and whether the country's increasing revenue is translating into meaningful economic relief for ordinary citizens.
Ajaero challenges FG over continued foreign borrowing
Reacting to the Federal Government's borrowing plans, NLC President Joe Ajaero questioned the justification for continued borrowing from international financial institutions, particularly the International Monetary Fund (IMF) and the World Bank.
Speaking on Channels Television's The Morning Brief, Ajaero argued that the government must explain why it continues to seek foreign loans after announcing that the removal of petrol subsidies has significantly improved its revenue position.
He asked:
"What is the justification for continually borrowing from the International Monetary Fund and the World Bank and other agencies when there is enough money?"
Ajaero maintained that the government cannot simultaneously celebrate increased revenue, higher allocations to state governments and the financial gains of subsidy removal while continuing to depend heavily on external borrowing without providing convincing explanations.
He also questioned the timing of the proposed loans, particularly against the backdrop of rising international crude oil prices.
Oil prices and the $70 benchmark controversy
The NLC president specifically drew attention to the increase in crude oil prices above $100 per barrel following tensions involving the United States and Iran.
He questioned why Nigeria should continue seeking additional loans when higher oil prices could potentially translate into increased revenue for an oil-producing country.
"If the 2026 budget was prepared with crude oil price benchmarked at $70 per barrel and now sells above $100 per barrel due to the US-Iran crisis, should this country still be taking loans?" he asked.
There is, however, an important budget clarification. President Tinubu's official 2026 budget speech published by the State House puts the approved crude oil benchmark at $64.85 per barrel, rather than $70. The government also projected crude oil production of 1.84 million barrels per day.
Ajaero urged Nigerians to demand accountability from the government, stressing that the labour movement does not possess the constitutional authority to approve or reject government borrowing. Such decisions ultimately rest with the relevant government institutions and the National Assembly.
The bigger question: where is the money going?
The controversy raises fundamental questions about Nigeria's fiscal management, particularly the relationship between rising government revenue, foreign borrowing and the country's capacity to meet its financial obligations.
According to Tinubu's 2026 budget presentation, the Federal Government projected total revenue of ₦34.33 trillion, expenditure of ₦58.18 trillion and debt-servicing obligations of ₦15.52 trillion. The projected budget deficit stood at ₦23.85 trillion. The State House, Abuja
These figures underline the enormous financial gap facing the government and explain why borrowing remains part of its financing strategy.
Nevertheless, Nigerians have legitimate reasons to demand transparency over how borrowed funds are utilised, the projects they finance and the tangible benefits they deliver.
Responding to concerns surrounding the loans, Tinubu maintained that the success of the borrowing strategy should ultimately be measured by its impact on national development rather than the mere ability to secure financing.
"Securing financing is only the beginning. The real achievement lies in completing projects, delivering value for money, and improving Nigerians' lives," the President said.
Ultimately, the disagreement between the Presidency and the labour movement goes beyond economic statistics. It touches on a critical national question: if government revenue is increasing and the economy is recording growth, why must Nigeria continue to borrow, and when will ordinary Nigerians begin to feel the benefits of these economic reforms?
For many Nigerians, economic recovery cannot be measured by GDP figures and declining inflation alone. It must also reflect improved purchasing power, affordable food, employment opportunities, reliable infrastructure and a meaningful reduction in the financial pressures facing households.
Sources: Channels Television, State House Nigeria, National Bureau of Statistics (NBS), Central Bank of Nigeria (CBN) and Reuters.
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