On May 29, 2023, the Nigerian social contract was fundamentally rewritten with three blunt words: Subsidy is gone. It was presented as a surgical necessity, an amputation of a gangrenous limb that was draining the lifeblood of the nation. The logic was seductive in its simplicity. By stopping the trillions of Naira previously burnt in fuel tanks, the government would finally have the liquidity to fund hospitals, schools, and infrastructure without the humiliating crutch of constant borrowing. We were told that the bleeding had stopped. Yet, three years into this administration, the fiscal reality feels less like a recovery and more like a transfusion that never ends.
The paradox is staggering. Monthly allocations to the three tiers of government have surged to record levels, frequently crossing the ₦2 trillion mark. Total revenues shared have nearly tripled since the pre-subsidy era. But instead of seeing a corresponding drop in our debt profile, we are witnessing a borrowing binge of historic proportions. In early 2026, Nigeria’s total public debt stock climbed past ₦159 trillion. While the government celebrates savings, it is simultaneously knocking on the doors of the World Bank and the Eurobond market, requesting billions of dollars in fresh credit. If the subsidy removal was the cure for our debt addiction, why does the patient seem more dependent on the needle than ever before?
The answer lies in a combination of currency devaluation and a refusal to shrink the cost of governance. When the government floated the Naira alongside removing the subsidy, it performed a fiscal magic trick that backfired. We began saving in a weakened Naira but remained obligated to repay our massive external debts in soaring Dollars. Today, we find ourselves in a Debt Servicing Trap where a massive portion of our revenue is swallowed by interest payments. In the 2026 fiscal cycle, Nigeria is projected to spend a jaw-dropping ₦15.8 trillion just to stay current with its creditors. This is not governance, it is a debt-funded treadmill. We are effectively using the money saved from the plates of hungry citizens to pay the interest on a mortgage that keeps growing.
Beyond the numbers, there is a profound moral crisis. To ask a population to endure the temporary pains of inflation and subsidy removal, the state must lead by example. Yet, the current administration has struggled to justify the optics of its spending. While the citizen’s subsidy was abolished, the politician’s subsidy appears untouched. The national ledger remains heavy with multi-billion Naira renovations for official residences, luxury vehicle fleets for the legislature, and a presidential air fleet that rivals the world’s wealthiest billionaires. It is impossible to sell a narrative of national sacrifice when the sacrifice is strictly reserved for those at the bottom of the pyramid.
Furthermore, we must address the ghost of the Ways and Means debt. The ₦30 trillion overdraft inherited from the previous era was securitized, meaning it was turned into formal bonds. While this made the debt legal, it also made the interest payments mandatory and massive. The current government argues that it must borrow to invest in legacy projects like the Lagos-Calabar Coastal Highway. But the question remains: is it wise to borrow billions for new concrete when the existing human capital is crumbling under the weight of 30 percent inflation? Borrowing for infrastructure is a long-term play, but Nigerians are facing a short-term survival crisis.
The hard truth is that borrowing has become a substitute for genuine fiscal reform. Instead of plugging the leaks in oil production where we still lose significant volumes to theft or aggressively widening the tax net for the elite, the government has chosen the path of least resistance: more debt. This approach treats borrowing as a revenue stream rather than a liability. By doing so, we are not just borrowing money; we are borrowing time, and we are doing it at an interest rate that our children will be paying for the next forty years.
Nigeria does not have a revenue problem. We have a prioritization and transparency problem. The removal of the fuel subsidy was supposed to be the moment we stopped living for today and started building for tomorrow. But as the debt clock nears the ₦200 trillion mark, it is becoming clear that we are doing neither. If the trillions of Naira saved from the subsidy cannot stop the perpetual need for fresh loans, then the subsidy was never the problem. The problem is a government that has mastered the art of taking but has yet to learn the discipline of saving.
An award-winning economy cannot be built on a foundation of saving in public while borrowing in private. For the Tinubu administration to truly have no business with borrowing, it must first prove that it has a business with accountability. Until the subsidy savings are reflected in a shrinking deficit and a stabilized Naira, the public will continue to view these reforms not as an economic reset, but as a fiscal betrayal. It is time to stop the magic tricks and start the hard work of living within our means. The bleeding hasn’t stopped; we have just changed the color of the bandages.
Stephanie Shaakaa
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