By Tanimu Yakubu

Nigeria’s growing debate over deficits, public debt and fiscal expansion has become increasingly shaped by political rhetoric rather than economic analysis, with critics of the administration of Bola Ahmed Tinubu portraying government borrowing as evidence of recklessness rather than a conventional tool of macroeconomic management.

According to Tanimu Yakubu, Director-General of the Budget Office of the Federation, many public criticisms of Nigeria’s fiscal strategy ignore both economic theory and the country’s long-standing structural challenges.

Yakubu argued that modern economies are managed through “theory, evidence, history and context,” not through what he described as simplistic market fundamentalism or moral arguments against borrowing.

Fiscal Expansion and Economic Stabilization

The Budget Office chief defended deficit spending as a globally recognized instrument for stabilizing economies during periods of weak private-sector demand, structural imbalance and market disruption.

Referencing economists such as John Maynard Keynes, Paul Samuelson, Paul Krugman and Joseph Stiglitz, Yakubu said no major school of macroeconomic thought advocates fiscal paralysis during periods of economic stress.

He noted that government expenditure on infrastructure, rail, roads, social transfers and security ultimately circulates through the economy as household income, corporate earnings, supplier payments and tax revenues.

“Government expenditure becomes somebody else’s income,” Yakubu said, arguing that critics often overlook the relationship between public spending, business activity and liquidity conditions.

Nigeria’s Debt Position

Yakubu also pushed back against what he described as sensational interpretations of Nigeria’s debt profile, insisting that sovereign debt must be assessed through debt sustainability metrics rather than headline figures alone.

He said Nigeria’s debt-to-GDP ratio stood at approximately 36.9 percent as of December 2025, which remains below levels recorded in several advanced and emerging economies.

By comparison, he noted that debt levels exceed 120 percent of GDP in the United States and more than 250 percent in Japan, while ratios in France, United Kingdom, India and Brazil also remain significantly higher.

According to Yakubu, Nigeria’s primary challenge is not simply the size of its debt stock, but weak revenue mobilization and the need to ensure borrowed funds are directed toward productive sectors capable of supporting long-term growth.

“The solution is not performative austerity, but economic expansion, export growth, productivity enhancement and structural transformation,” he argued.

Reform and Transitional Pain

Yakubu said economic reforms are rarely painless, citing examples from China, India, South Korea and Indonesia, where major structural reforms were accompanied by temporary economic hardship before longer-term gains emerged.

He argued that many of Nigeria’s current economic difficulties stem from decades of fuel subsidy distortions, oil dependence, exchange-rate imbalances, insecurity and weak productivity growth accumulated over successive administrations.

According to him, critics who isolate current economic conditions from that broader historical context are engaging in political messaging rather than economic analysis.

Due Process and Public Accountability

Yakubu also criticized what he described as the growing tendency in public discourse to treat allegations under investigation as established facts.

He said parliamentary inquiries and oversight investigations should not be conflated with judicial convictions, warning that democratic institutions are weakened when accusations are elevated into conclusions without due process.

“A mature democracy distinguishes between allegation and evidence, inquiry and guilt, accusation and proof,” he said.

Role of the State in Economic Development

Defending state intervention in economic management, Yakubu argued that nearly every major industrialized economy relied heavily on government support, industrial policy or strategic financing during periods of development.

He cited the experiences of the United States, China, Japan and South Korea as examples of economies that combined market systems with active state intervention.

He added that governments worldwide abandoned fiscal conservatism during the 2008 global financial crisis and the COVID-19 pandemic, injecting trillions of dollars into their economies through deficit financing.

Outlook for Nigeria

Yakubu maintained that Nigeria’s long-term recovery depends on whether current reforms succeed in restoring macroeconomic stability, broadening the tax base, improving productivity and expanding economic growth capacity.

He argued that economic transformation inevitably involves difficult trade-offs and temporary disruptions, but said countries that eventually achieve durable growth are often those willing to confront structural weaknesses rather than postpone reforms for short-term political comfort.

“Economic transformation is difficult, disruptive and politically costly,” Yakubu said. “But nations are rebuilt through reforms grounded in macroeconomic realism, fiscal pragmatism and long-term thinking.”