Atiku: $4.5bn oil-backed loan will push Nigeria deeper into debt

Atiku Abubakar, former vice-president and presidential candidate of the African Democratic Congress (ADC), has criticised the National Economic Council’s (NEC) approval of a new $4.5 billion oil-backed loan facility for the Nigerian National Petroleum Company (NNPC) Limited.

The former vice-president said the refinancing arrangement would deepen Nigeria’s debt burden and further mortgage the country’s future.

On Monday, the NEC approved the refinancing of the NNPC’s $3.3 billion Project Gazelle pre-export finance facility through a new $4.5 billion facility known as Project Gazelle 2.

The new arrangement is expected to refinance the outstanding $1.5 billion balance on the original 2023 facility while unlocking an additional $3 billion in liquidity to strengthen Nigeria’s external reserves and support the government’s fiscal and infrastructure priorities.

Reacting in a statement on Wednesday by Phrank Shaibu, his senior special assistant on public communication, Atiku said the refinancing arrangement was further evidence that the Tinubu administration was mortgaging Nigeria’s future to sustain what he described as reckless fiscal policies.

He said every new oil-backed obligation is pushing the country deeper into a cycle where future crude oil earnings is being used to finance present-day spending.

“Every new oil-backed obligation pushes Nigeria deeper into a vicious cycle where tomorrow’s wealth is sacrificed to finance today’s policy failures,” he said.

The former vice-president recalled that the presidency recently defended the government’s inability to fully benefit from higher international crude oil prices by saying future crude earnings had already been committed to servicing oil-backed foreign loans.

“That explanation should have embarrassed any responsible government. Instead, this administration has chosen to double down on the very scandal it sought to justify by approving yet another $4.5 billion refinancing,” Atiku said.

“Rather than breaking free from the chains of oil-backed indebtedness, it is tightening them.”

Atiku questioned why the government continued to refinance oil-backed loans despite implementing economic reforms, removing petrol subsidy, raising taxes and increasing domestic borrowing.

“What kind of government inherits a nation blessed with abundant oil resources, removes fuel subsidy, imposes multiple taxes, records unprecedented crude oil windfalls, borrows aggressively at home, and still finds it necessary to refinance billions of dollars secured against the country’s future oil production?” he asked.

“This administration has turned Nigeria into a nation permanently living on credit. Instead of using increased revenues to reduce debt and build fiscal resilience, it continues to mortgage the future of generations yet unborn.”

He said Nigerians had endured significant hardship without seeing the promised benefits of the administration’s reforms.

“The tragedy is not merely the refinancing itself. The tragedy is that Nigerians have been subjected to untold hardship in the name of economic reforms, yet the borrowing never stops,” he said.

“The pain is permanent, but the promised gains remain invisible.”

Atiku said the Tinubu administration had made debt accumulation a defining feature of governance.

“President Tinubu promised renewed hope. What Nigerians have received is renewed debt, renewed hardship and renewed uncertainty,” he said.

“Under his watch, debt has become policy, borrowing has become governance, and mortgaging the future has become the defining philosophy of his administration,” he said.

“Tinubu has become the weapon fashioned against Nigeria’s economy. Nigeria deserves leadership that preserves national assets, not one that continually pledges them to finance an endless cycle of waste, opacity and fiscal irresponsibility.”

The former vice-president called on the federal government to publish the full details of the refinancing arrangement, including its terms, repayment obligations and the volume of crude oil committed under the deal.

He said Nigerians deserve transparency and accountability in transactions involving the country’s oil resources.