CITM cautions FG against fresh borrowing, urges fiscal discipline

The Chartered Institute of Treasury Management (CITM) has warned the Federal Government against taking on new loans, cautioning that additional borrowing could further weaken Nigeria’s already fragile debt position.

Registrar of CITM, Mr. Olumide Adedoyin, issued the warning in a statement on Wednesday in Abuja, against the backdrop of rising debt levels and reports of fresh borrowing plans.

Adedoyin advised that if new borrowing became absolutely necessary, it should be directed strictly at critical, revenue-generating infrastructure projects, and sourced only on concessional terms, low interest and long tenors, from multilateral institutions.

“As at mid-2024, Nigeria’s debt picture is characterised by rapid growth, a changing composition, and significant fiscal pressures,” he noted.

While commending the administration for recording a 2025 revenue surplus, Adedoyin said this presented a rare opportunity to reduce fiscal dependence on debt.

“The Nigerian government is correct to celebrate improved revenue, as it is the primary tool to escape the debt trap. However, the Rt. Hon. Speaker Abbas Tajudeen’s warning is the necessary counterbalance, highlighting that the current debt level is unsustainable and threatens the nation’s economic future,” he stressed.

Adedoyin emphasised that the path forward lay not in piling up new loans but in enforcing radical fiscal discipline and pursuing aggressive revenue generation. He outlined a multi-pronged strategy to achieve this:

Aggressive revenue mobilisation: Expanding the tax net by bringing millions of informal businesses and high-net-worth individuals into the system through technology and data-driven approaches.

Broadening tax base: Shifting focus toward taxing wealth and consumption, rather than overburdening income earners.

Diversifying non-oil revenue: Prioritising sectors such as solid minerals, agriculture, and the digital economy to boost exports and taxes.

Ensuring transparency in oil revenues: Making sure the Nigerian National Petroleum Company (NNPC) Ltd. remits its full obligations to the Federation Account.

On debt sustainability, he urged the government to proactively renegotiate with bilateral and commercial creditors to restructure existing obligations—extending tenors and lowering interest rates to ease annual repayment pressures.

Adedoyin concluded that Nigeria’s long-term fiscal stability would depend on “discipline, innovation, and the political will to expand revenue without suffocating growth.”