By Osaretin Osadebamwen
Renowned economist and former Director-General of the West African Institute for Financial and Economic Management (WAIFEM), Professor Akpan Ekpo, has urged the Federal Government to significantly reduce its reliance on foreign borrowing, recommending a debt structure dominated by domestic loans.
Ekpo made the recommendation Tuesday during an on Arise TV, interview while analysing Nigeria’s rising debt profile and the country’s growing fiscal challenges.
According to him, Nigeria should adopt a debt portfolio comprising about 60 to 65 percent domestic borrowing and 35 to 40 percent external borrowing to minimise exposure to exchange rate volatility.
He explained that while borrowing is not inherently bad, governments must ensure loans are channelled into productive capital projects capable of generating economic growth, creating jobs and improving infrastructure.
The professor warned that excessive dependence on foreign loans exposes the country to currency risks, especially as the naira continues to face pressure in the foreign exchange market.
He stressed that domestic borrowing, although not without challenges, offers greater protection against exchange rate fluctuations and allows government to better manage its debt obligations.
Ekpo also advised the Federal Government to temporarily slow down fresh borrowing until revenue generation improves, warning that rising public debt poses an intergenerational burden on future Nigerians.
He maintained that borrowing should never be used to finance recurrent expenditure except during exceptional economic emergencies such as recessions aimed at stimulating demand.
The economist further called for greater transparency in Nigeria’s debt management, insisting that citizens deserve to know how borrowed funds are utilised and whether they deliver measurable economic benefits.
He advocated wider adoption of Public-Private Partnerships (PPP) as an alternative source of financing major infrastructure projects, arguing that such arrangements reduce government borrowing while sharing risks with private investors.
Ekpo added that although Nigeria is currently meeting its debt obligations, worsening revenue challenges and increasing cost of governance could threaten long-term debt sustainability if corrective measures are not taken.
He concluded that prudent borrowing, fiscal discipline and greater accountability remain critical to protecting Nigeria’s economy and ensuring future generations are not overwhelmed by today’s debt decisions.
