Ndubuisi Francis in Abuja
Yakubu Defends Rising Debt, Says Critics Exhibiting ‘Economic Illiteracy,’ Insists Deficit Spending Normal
The federal government has dismissed concerns raised by critics over rising borrowing and debt accumulation, insisting that deficit spending was neither criminal nor abnormal.
The Director-General of the Budget Office of the Federation (BoF), Dr. Tanimu Yakubu, conveyed the government’s position in a lengthy statement titled “Deficits, Debt and Economic Literacy: A Response to Nigeria’s Fiscal Critics,” which he released over the weekend.
He described debt as one of the oldest instruments of macroeconomic stabilisation known to economic theory and modern statecraft.
Yakubu, whose riposte was laced with harsh words for critics of the government’s relentless borrowing culture, said critics of rising debt were doing so out of “economic illiteracy.”
He said: “Those who speak glibly about deficits, debt, and fiscal expansion often reveal not economic sophistication, but economic illiteracy disguised as moral outrage.
“Much of today’s opposition rhetoric confuses accounting identities with ideological slogans and mistakes macroeconomic intervention for recklessness.
“A modern economy is not managed through market romanticism. It is managed through theory, evidence, history, and context.
“The loudest critics of Tinubu’s administration speak as though government borrowing is inherently immoral, as though deficits emerge from vice rather than economic necessity, and as though Nigeria’s economic difficulties suddenly materialized on May 29, 2023.
“Such arguments are neither historically grounded nor economically coherent.
“No serious economist — from Keynes to Samuelson, from Krugman to Stiglitz — has argued that governments should retreat into fiscal paralysis during periods of structural imbalance, liquidity stress, and inherited distortions.
“The central insight of modern macroeconomics is precisely the opposite: When private demand weakens, when markets fail to allocate efficiently, or when structural rigidities suppress growth, the state must intervene counter-cyclically to restore equilibrium. That is not ideology. That is orthodox macroeconomics,” he explained.
According to him, those attacking deficit spending behaved as though government borrowing was money disappearing into thin air, and added that critics fundamentally failed to understand the most elementary principle of national income accounting —that government expenditure became somebody else’s income.
He further argued that when the government spent on infrastructure, security, rail, roads, social transfers, or capital projects, the money circulated through the economy as contractor revenues, household income, supplier payments, corporate earnings, pension assets, and tax receipts.
“One sector’s deficit is frequently another sector’s surplus,” he added.
“Indeed, the private sector balances often celebrated by critics are themselves the mirror image of public deficits.
“The irony is profound. Many of those condemning public borrowing are often the first to celebrate improved liquidity, increased business activity, rising consumer demand, and stronger corporate earnings, even though these outcomes are frequently driven by fiscal injections into the economy. “What they denounce politically, they quietly benefit from economically,” he added.
In what appears to be an attempt at buck-passing, Yakubu noted that “many of the liabilities now being weaponized against the current administration were accumulated over years, including periods when President Tinubu was not in office.”
He argued that those he labeled as propagandists compressed decades of structural dysfunction into a single political narrative, adding that this was not analysis but propaganda masquerading as economics.
“Nigeria’s fiscal vulnerabilities did not begin in 2023. They are the product of decades of fuel subsidy distortions, chronic underinvestment, oil dependency, exchange-rate misalignment, insecurity, weak productivity growth, and persistent revenue underperformance.
“To discuss today’s debt profile without acknowledging yesterday’s accumulated distortions is intellectually dishonest,” he said.
Yakubu further argued that serious economists did not assess debt based solely on sensational headlines or absolute figures, but also examined debt sustainability, debt service capacity, debt composition, maturity structures, currency exposure, and debt-to-GDP ratios.
“By global standards, Nigeria’s debt-to-GDP ratio remains comparatively modest at 36.9 per cent as at December 2025. By comparison, the United States carries debt above 120 per cent of GDP, Japan above 250 per cent, Singapore above 170 per cent, France above 110 per cent, the United Kingdom around 100 per cent, India above 80 per cent and Brazil above 85 per cent.
“Nigeria, therefore, remains significantly below many advanced and emerging economies on pure debt stock metrics. The real Nigerian challenge is not simply debt accumulation, but weak revenue mobilisation and the productive deployment of borrowed resources.
“A country with low revenue-to-GDP ratios will naturally face debt-service pressures even at comparatively moderate debt levels. The solution is therefore not performative austerity, but economic expansion, export growth, productivity enhancement, tax-base broadening, and structural transformation,” the DG, Budget Office added.