national debt
National debt is the total the government owes, and what matters is not the size of it but how much of the budget goes to servicing it.
In plain English
A frightening number gets quoted, everybody gasps, and almost nobody explains the part that matters.
National debt is the total a government owes, to its own citizens and institutions and to lenders abroad. It grows whenever the government spends more than it collects.
The size alone tells you very little. A wealthy country can carry an enormous debt comfortably. What actually matters is the servicing cost as a share of what the government collects. When a large portion of revenue goes simply to paying interest, that is money not going to roads, hospitals or schools, and no policy speech can change the arithmetic.
Debt borrowed in foreign currency carries a second danger that Nigerians should understand very well. If the naira weakens, the debt does not, so the cost of repaying it in naira rises without anybody borrowing another kobo.
None of this makes borrowing wrong. Borrowing to build something that generates growth can genuinely pay for itself.
The question is always the same, and it is the one you should ask of your own debts too. What did we buy with it, and will it earn more than it costs?
A government borrows heavily in dollars. The naira then weakens by 30 percent. The debt is unchanged in dollars and has grown enormously in naira, and every future budget must find more money simply to stand still.
Questions people ask
Is Nigeria's debt too high?
Economists disagree, and the honest measure is debt service as a share of revenue rather than the headline total. That ratio is where the real concern sits.
Why is foreign currency debt riskier?
Because if your currency weakens, the debt does not shrink with it. You must find more naira to repay the same dollars.
Does national debt affect me?
Yes. Money spent servicing debt is money not spent on services, and heavy borrowing can push up interest rates and inflation, both of which reach your wallet.
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