Nigeria Should Mobilise Local Capital Before Seeking Cheaper Foreign Loans

I believe African governments, including Nigeria’s, should focus on organising local capital and reducing inflation before complaining about the cost of foreign borrowing. High inflation and weak fiscal management raise interest rates, making credit expensive for both governments and businesses. Nigeria already has potential domestic funding sources, including pension savings and the capital market. If investors trust that inflation will not erode returns, more long-term local funds can support government borrowing and private-sector growth. For businesses, I argue that equity financing through the NGX and other credible investment channels can be cheaper than relying heavily on loans. Stronger revenue collection, lower inflation and credible policies would make finance more affordable and reduce dependence on external lenders.

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