Nigeria Ranks Third Among Africa’s Top 10 Debtors: A Legacy of Corruption and Mismanagement
Nigeria has once again found itself among the top debt-ridden countries in Africa, ranking third among the 10 African nations that collectively hold 69 percent of the continent’s total external debt. While external economic pressures and high interest rates have been cited as key factors, a critical examination of Nigeria’s debt burden reveals a deeper, systemic issue—endemic corruption and decades of financial mismanagement by the country’s political elite.
The latest report by the Africa Export and Import Bank (Afreximbank), titled African Debt Outlook: A Ray of Optimism, states that Africa’s external debt levels remain high due to limited domestic financial markets and reliance on costly foreign borrowing. However, in Nigeria’s case, the crisis has been exacerbated by the reckless handling of public funds, unaccountable leadership, and the looting of the nation’s wealth by politicians who have historically used government positions for personal enrichment.
Nigeria’s Position in Africa’s Debt Landscape
According to Afreximbank, 10 African countries accounted for 69 percent of the continent’s total external debt in the first half of 2024. Nigeria ranks third on the list with 8 percent of the debt, behind South Africa (14 percent) and Egypt (13 percent). Other heavily indebted nations include Morocco (6%), Mozambique (6%), Angola (5%), Kenya (4%), Ghana (4%), Côte d’Ivoire (3%), and Senegal (3%).
The report highlights how excessive reliance on foreign exchange to finance imports has worsened the continent’s external debt, a situation fueled by dependence on international aid, concessional loans from multilateral institutions, and competitive lending rates from private creditors. In Nigeria, however, these borrowed funds have often been misappropriated by successive administrations, lining the pockets of corrupt officials rather than being invested in critical infrastructure and development projects.
Decades of Corruption: The Root Cause of Nigeria’s Debt Crisis
Nigeria’s external debt, like much of its economic instability, can be traced to widespread corruption among its political class. Over the years, Nigerian politicians have repeatedly engaged in financial misconduct, signing dubious loan agreements, inflating contracts, and embezzling public funds meant for national development.
From the military regimes of the past to the democratic administrations of the present, Nigeria’s leaders have treated governance as an opportunity for self-enrichment. Billions of dollars in public funds have either been siphoned through fraudulent schemes or wasted on projects that never materialized. Some high-profile cases include:
The Abacha Loot: Former military ruler Sani Abacha is believed to have stolen over $5 billion from Nigeria’s coffers, funds that are still being recovered decades after his death.
Petroleum Subsidy Scandal: Under various administrations, billions of dollars allocated for fuel subsidies have either vanished or been funneled into the accounts of government officials and their associates.
Misuse of COVID-19 Relief Funds: During the pandemic, billions in international aid and loans meant to support economic recovery and public health were allegedly diverted by political figures.
These instances, among many others, demonstrate how political corruption has left Nigeria drowning in debt while its leaders continue to live in luxury at the expense of the masses.
A Debt Trap with No Clear Exit Strategy
Since 2008, the external debt of African countries has risen significantly, with Nigeria playing a major role in this uptrend. The continent’s total external debt reached approximately $1.16 trillion in 2023, representing 60 percent of its total public debt. Projections indicate a further increase to $1.17 trillion in 2024, with sustained growth expected to push it to $1.29 trillion by 2028.
For Nigeria, the burden of repayment remains a growing concern, especially as interest rates continue to climb and the country’s revenue base remains weak due to overdependence on oil. With corruption still deeply embedded in governance, funds meant for debt servicing and economic growth are frequently misused, putting the country at risk of defaulting on obligations that will affect future generations.
The Way Forward: Can Nigeria Escape the Cycle?
If Nigeria is to break free from its debt crisis, it must tackle corruption at its core. Transparency in government spending, stringent anti-corruption measures, and a shift towards domestic revenue generation are essential. The government must also prioritize sustainable economic policies that reduce dependency on foreign loans while ensuring that borrowed funds are used strictly for productive purposes.
Without a genuine commitment to accountability and financial discipline, Nigeria will remain trapped in a cycle of debt, with its leaders enriching themselves at the expense of its people. Until political will aligns with national interest, the country’s financial future will continue to be dictated by external creditors rather than its own economic potential.
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Nigeria Ranks Third Among Africa’s Top 10 Debtors: A Legacy of Corruption and Mismanagement