Editorial: Tinubu Is Squandering Nigeria's Iran War Oil Windfall

Nigeria is in the middle of an oil bonanza. A geopolitical earthquake; the US–Iran war has pushed global crude prices to $115 per barrel, nearly double the federal benchmark of $64.85. Abuja is earning over $92 million in extra oil revenue every single day. In barely one month, the country has pocketed almost $3 billion in unbudgeted oil income. This should be a moment of national relief. A chance to rebuild reserves. A chance to reduce borrowing. A chance to stabilize the naira. A chance to prepare for the next downturn. Instead, the Tinubu administration is doing the exact opposite: spending recklessly and aggressively borrowing the country into a fiscal abyss, as though Nigeria were a country immune to economic gravity.

 

There is something almost ritualistic about Nigeria’s relationship with oil windfalls. The prices rise, the money flows, the government celebrates; and then, with a consistency that would impress a metronome, the opportunity is squandered. The latest episode, unfolding under President Bola Tinubu, is no exception. Indeed, it may be among the most brazen. At a moment when Nigeria is earning billions from soaring crude prices triggered by the US–Iran conflict, one might reasonably expect a government serious about fiscal discipline to behave, well, prudently. Save the windfall. Pay down debt. Build buffers against future shocks. Instead, Abuja has chosen the familiar path: spend more and borrow even more.

 

But Tinubu’s government is addicted to borrowing, even in a boom. The numbers are stark. Oil prices have nearly doubled Nigeria’s benchmark, generating billions in additional revenue. Yet in a move that defies logic, the National Assembly has approved a N68.323 trillion budget; the largest in Nigeria’s history; a $5 billion loan from Abu Dhabi; a $1 billion UKEF backed loan for Lagos ports, and a $6 billion external borrowing package rushed through the Senate in under four hours. This is happening at the exact moment Nigeria is earning billions in oil windfall revenue. This is not fiscal strategy. It is fiscal insanity and schizophrenia. Borrowing heavily during an economic downturn can be justified. Borrowing aggressively during a windfall is something else entirely; it suggests either a failure of planning or an indifference to consequences.

 

Countries with competent leadership use oil windfalls to pay down debt, build foreign reserves, strengthen sovereign wealth funds, stabilize their currencies, and invest in long term infrastructure

Norway did it. Saudi Arabia does it. Even Angola does it. Nigeria, by contrast, behaves like a gambler who wins the lottery and immediately takes out a loan to buy more lottery tickets. Where is the Sovereign Wealth Fund? Where is the Stabilization Buffer?

 

What is most disappointing is not merely the policy choices, but the lack of imagination behind them.

Nigeria has been here before. It has experienced oil windfalls before. It has squandered them before: the 1970s oil boom was squandered; the 1980s boom evaporated into debt and austerity; the 2008 boom vanished into corruption and waste; and the 2011 boom disappeared into election spending. Now, in 2026, history is repeating itself again. Faced with another opportunity to do things differently, the President and his political co-travelers have chosen the comfort of repetition over the challenge of reform. It is as though history is not merely repeating itself; it is being carefully rehearsed. Tinubu is spending like a drunken sailor with Nigeria’s credit card with no spending limit. The revised budget allocates N15.8 trillion to debt servicing, N15.4 trillion to recurrent expenditure, and N32.2 trillion to capital projects; many of them rolled over from previous years due to incompetence. This is not fiscal discipline. It is fiscal vandalism. Former Vice President Atiku Abubakar, hardly a neutral observer, has described the borrowing spree as “reckless.” On this occasion, he is not wrong. Atiku is correct when he warns that the Senate has become a “conveyor belt” for executive borrowing. Approving a $6 billion loan in under four hours is not oversight; it is legislative malpractice. 

The expanded budget reads less like a disciplined fiscal plan and more like a shopping list compiled in a moment of exuberance. Billions are allocated to infrastructure, judiciary expansion and legacy obligations ahead of the 2027 elections; and political patronage disguised as capital projects. This is not economic planning. It is election year engineering. Some of these expenditures are undoubtedly necessary. Nigeria’s infrastructure deficit is real, and its institutions require strengthening. But necessity is not the issue. Timing is. A windfall is not a permanent income stream. It is, by definition, temporary. To treat it as a license for permanent expenditure is to repeat one of the oldest mistakes in resource economics. Countries that manage resource wealth successfully; Norway being the textbook example, save during booms and spend cautiously. Nigeria, by contrast, behaves as though every boom will last forever. It never does.

 

Nigeria’s debt profile is already troubling. With public debt hovering around $115 billion and debt servicing consuming N20.5 trillion in 2026; a large share of government revenue, the country has little room for fiscal recklessness. Yet the Tinubu administration appears determined to test the limits of that reality. The naira remains fragile. Inflation is suffocating households. Foreign investors are fleeing.

Yet the government continues to borrow as though the country has infinite credit. Borrowing to refinance existing debt, plug budget gaps and fund routine expenditure is not a development strategy. It is, as critics have noted, a cycle that leads inevitably to deeper fiscal vulnerability. The logic is circular: borrow to spend, spend to sustain political commitments, then borrow again to cover the resulting deficits. It is the economics of a treadmill. Nigeria cannot borrow its way out of crisis.

 

With nearly $3 billion already earned; and up to $36 billion possible if the war persists, Nigeria had a rare opportunity to rebuild the Excess Crude Account; strengthen the Sovereign Wealth Fund; stabilize the naira; reduce debt; invest in power, health, and education, and create fiscal breathing room. Instead, the Tinubu administration is burning through the windfall before it even arrives. Perhaps the most striking feature of the current moment is the complete absence of any serious effort to save. Nigeria has, in theory, mechanisms designed for this purpose, such as the Excess Crude Account. In practice, these mechanisms have been repeatedly depleted, ignored or rendered politically inconvenient. The result is a country that experiences oil booms without building oil buffers. When prices eventually fall, as they always do, Nigeria will once again find itself scrambling, cutting budgets, devaluing currency and appealing to international lenders. And the cycle will begin anew.

 

All of this might be dismissed as abstract fiscal mismanagement were it not for its very real consequences. Nigeria is already grappling with high inflation, widespread poverty, currency instability, and rising cost of living. At a time when the government should be using windfall revenues to cushion citizens from economic hardship, it is instead expanding expenditure and accumulating debt. The message to Nigerians is unmistakable: the boom is not for you. President Tinubu has argued that his administration is steering Nigeria toward stability and growth. Perhaps that is the intention. But intentions are not outcomes. 

 

For now, the evidence points in a different direction: a government awash with oil money, yet unable, or unwilling to exercise the discipline required to use it wisely. The tragedy is not that Nigeria is poor. The tragedy is that Nigeria is mismanaged. The oil windfall is a gift; one that responsible governments would treat as a national blessing. But under Tinubu, it is being treated as a political slush fund and an excuse for more borrowing. Nigeria is earning billions from a distant war. It should be preparing for the day when the windfall ends. Instead, it is spending as though the war will last forever. It won’t. History will not be kind to this moment. And future generations will pay for it.