Borrowing and National Development: Lessons for Nigeria
By Rahab Abashi,
Debt has emerged as one of the most contentious topics in Nigeria today. Public opinion is often divided as many view borrowings as an inherent evil, while others argue it is a necessary tool for development.
In my view, borrowing is not fundamentally detrimental; rather, the crux of the matter lies in how these funds are utilized and whether they effectively stimulate national growth.
Many of the world’s most powerful economies operate on significant debt. Global leaders such as the United States, Japan, China, the United Kingdom, France, Germany, India, Italy, Canada, and Brazil all carry substantial national burdens.
The United States owes over $34 trillion, Japan’s debt exceeds $9 trillion, and China’s stands at more than $14 trillion. Similarly, developed nations like the United Kingdom, France, and Italy owe trillions of dollars.
Despite these figures, these nations maintain robust economies because they channel borrowed capital into high-impact sectors like industries, technology, infrastructure, and commerce.
A defining characteristic of these successful nations is their diversified revenue streams. The United States generates wealth through technology, entertainment, finance, and manufacturing. China dominates in production and exports, while Germany is a global leader in engineering and automobiles.
India, meanwhile, earns significantly from software services and its world-renowned film industry, Bollywood. While these countries borrow, they possess resilient systems that generate the income necessary to service and repay those loans without serious impact on citizens.
Nigeria’s predicament is notably different due to an over-reliance on a single commodity. Crude oil remains the nation’s primary source of revenue and foreign exchange.
Consequently, whenever global oil prices fluctuate, the Nigerian economy suffers a direct hit. This volatility highlights the inherent risk of a mono-product economy, particularly for a country with Nigeria’s massive population.
I believe that borrowing itself is not the primary issue. The real challenges are poor management and a lack of economic diversification. If Nigeria secures loans to revitalize electricity, transportation, agriculture, education, and healthcare, debt becomes a catalyst for development.
However, when borrowed funds are mismanaged or fail to improve the standard of living, debt is understandably perceived as a burden.
Beyond oil, Nigeria possesses several sectors with immense revenue potential. Agriculture is paramount, given our fertile land and large workforce; the country could achieve significant gains from rice, cocoa, cassava, and palm oil exports.
Our entertainment industry is expanding rapidly, with Nigerian music, film, comedy, and fashion gaining global acclaim. Technology also offers a bright frontier, as Nigerian youth increasingly excel in digital skills, software development, and innovation.
With these potentials lying stale, Nigeria must pivot toward developing a multi-sectoral economy. Economically successful nations are rarely dependent on a single source of income.
Borrowing is a viable strategy provided the capital is invested wisely in productive sectors that drive growth and create jobs.
If the giant of Africa prioritizes investment in agriculture, entertainment, technology, manufacturing, and tourism, it can build a resilient economy and finally break its precarious dependence on oil.
Abashi Rahab is a student of Strategic Communication at Yakubu Gowon University, Abuja. An intern with IMPR. She can be reached at: [email protected]
