Economists advocate equity financing to curb Nigeria’s debt
Lagos, Aug. 2026 (TBL Africa) An economist, Dr Ayo Teriba, has urged the Federal Government to explore equity financing for infrastructure projects to reduce reliance on borrowing and moderate the country’s rising debt.
Teriba, Chief Executive Officer, Economic Associates, made the call in an interview in Lagos on Saturday.
He said the government could raise funds for capital projects by taking state-owned enterprises to the capital market through public offerings, thereby attracting domestic and foreign investors.
“The government could raise money to fund projects by bringing its state companies into the market and engaging in public offers.
“This will enable foreign investors to have stakes in the companies, and there will be no need for the government to incur additional debt through borrowing,” Teriba said.
He said no country or company could sustainably finance major capital projects solely from current revenues, noting that both governments and businesses relied on the capital market to raise funds.
“Whether Dangote, MTN, Apple or any country, they cannot fund their capital projects from current revenues; they will rather issue liabilities.
“But when such liabilities become a challenge, they will again issue more equity and come to the market,” he said.
Teriba urged the government to deepen its participation in the capital market to finance infrastructure and support the expansion of the economy toward the $1 trillion target.
Also, Mr Benjamin Akinsoto, Senior Economic Researcher, BAA Consult, said borrowing was an important part of financing economic development, noting that countries could not completely avoid debt.
“Even the United States of America’s debt-to-GDP ratio is more than 100 per cent currently.
“Our debt-to-GDP ratio is sustainable, but the challenge is the debt-service-to-revenue ratio, which is a concern,” Akinsoto said.
He said government borrowing to finance critical infrastructure could boost productivity, provided the funds were transparently managed and channelled into productive sectors.
He urged the government to strengthen fiscal transparency and ensure that borrowed funds were invested in projects capable of expanding economic activity and increasing domestic revenue.
Akinsoto also advised the government to prioritise concessional financing from multilateral institutions, describing such loans as generally more favourable than commercial borrowing.
“Loans from Bretton Woods institutions are concessionary in nature and are usually better than Eurobonds.
“Eurobonds are expensive, and the government should be careful and track its debt so as not to pile up liabilities for generations yet unborn,” he said.
The Debt Management Office (DMO) said Nigeria’s total public debt rose to N159.35 trillion as of March 31.
According to the DMO’s latest public debt portfolio report, the figure represented a 6.7 per cent, or N9.96 trillion, increase from N149.39 trillion recorded at the end of the first quarter of 2025.
However, the debt stock was almost unchanged from the N159.28 trillion recorded at the end of December 2025.
On a quarter-on-quarter basis, public debt increased by N75.51 billion, representing a 0.05 per cent rise.
The latest debt stock comprises N87.4 trillion in domestic debt, accounting for 54.85 per cent of the total, and N71.95 trillion in external debt, representing 45.15 per cent.
