By DONALD PETERSON

In the wake of the National Assembly’s approval of a $21 billion loan request by the Federal Government, Nigerians are once again faced with difficult but necessary questions: Are we bartering away the future of unborn generations for immediate relief, or is this an opportunity to redefine our economic trajectory if properly managed?

At the same time, troubling developments in Lagos, the symbolic and economic nerve centre of the nation, are provoking conversations on ethnic identity, inclusiveness, and nation-building. Together, these events reflect the precarious intersection of economic planning and socio-political cohesion. The choices made today will echo for decades to come.

Debt, by nature, is not inherently a curse. Great nations have borrowed their way to greatness. The United States post-World War II, Germany after reunification, and even South Korea during its transformation era, all took on significant foreign debt. But the differentiating factor was not the amount of borrowing it was the discipline and focus of deployment.

Nigeria’s current debt profile, when juxtaposed against our meagre foreign reserves (hovering around $33 billion) and sluggish revenue generation capacity, raises serious concerns. With a population of over 220 million, an unemployment rate of 33%, and a tax-to-GDP ratio of just six per cent, the sustainability of our borrowings must be called into question not emotionally, but analytically.

Rather than sounding alarm bells without direction, we must insist on an institutional reform of our borrowing and implementation frameworks. Here are uncommon, yet necessary, recommendations:

Establishment of a National Assembly Debt Oversight Office, NADOO: Modeled after the U.S. Congressional Budget Office, this independent body should be empowered to assess, publish, and audit every loan’s economic impact forecast before approval. This ensures that every kobo borrowed is justified by a clear ROI and not by sentiment or lobbying.

Loan Deployment Scorecards: The Ministry of Finance in partnership with the National Bureau of Statistics should publish quarterly “Loan Utilization Scorecards” made publicly available, measuring execution rate, impact, and job creation metrics of borrowed funds. Without metrics, we court mayhem.

Tie Borrowing to Export-oriented Projects Only: Every foreign loan henceforth should be tied strictly to projects with foreign exchange earning capacity such as agriculture export clusters, mineral value chains, or high-tech innovation hubs. This is how Malaysia and Vietnam clawed out of debt traps.

Sovereign Loan Risk Quota System: The Debt Management Office should create a cap not just on the amount Nigeria can borrow, but on the percentage each tier of government can draw from such external debt. This prevents reckless subnational borrowing and fosters accountability at state levels.

Simultaneously, Nigeria faces an identity crisis festering beneath the surface of infrastructural ambitions and political maneuvering. The renaming of bus-stops and streets in Lagos, as well as the controversial demolition of Landmark Beach to pave the way for the Lagos-Calabar Coastal Highway, are triggering fears of ethnic marginalisation particularly among the Igbo, a group with indisputable contributions to Lagos’ economic rise.

Whether these actions were driven by logistics, oversight, or deeper agendas, the perception they have birthed is just as potent as the act itself.

If allowed to fester, these perceptions can catalyze economic sabotage, reduced inter-ethnic investments, and long-term migration of capital and talent to more “ethnically neutral” zones eroding Lagos’ status as Nigeria’s investment capital.

To neutralise this growing storm, we must move beyond tokenism and initiate sincere, strategic efforts:

Ethnic Impact Assessment, EIA, for Major Urban Projects: Just as we insist on environmental impact assessments, every major infrastructural project, particularly in multi-ethnic urban centres like Lagos, must include an EIA: an audit to evaluate potential socio-ethnic implications and mitigate backlash.

National Urban History Protection Act: The Federal Ministry of Culture and the National Assembly should urgently sponsor legislation that protects culturally significant landmarks across all tribes from erasure, renaming, or demolition without broad-based stakeholder consultations.

Creation of a Federal Unity Fund for Ethnic Harmony Projects: This fund, administered by the National Orientation Agency and Civil Society Coalitions, would finance inter-ethnic business cooperatives, culture fairs, and urban heritage preservation programmes across Nigeria’s key cities. The goal is not just to preserve history, but to deepen inter-ethnic economic collaboration.

Reverse Narratives Through Data and Dialogue: The Lagos State Government should commission and publicise a study that quantifies the economic contributions of various ethnic groups to the state. This transparent recognition of shared development could be a balm to frayed nerves.

What Lagos decides today about identity, and what Nigeria decides today about debt, will not only shape our headlines but our children’s inheritance. We are at a fork in the road: one path leads to a future scarred by distrust, mismanagement, and national disillusionment. The other leads to a renewed Nigeria, one that borrows wisely, invests inclusively, and preserves its ethnic mosaic as a competitive advantage.

To get there, government at all levels must resist the temptation of short-term optics and embrace long-term, equity driven reforms. The challenge is not in our diversity or our deficits, but in our refusal to confront uncomfortable truths and act boldly.

It is time to act not with emotion or vengeance, but with vision, empathy, and uncommon wisdom.

•Dr. Peterson, an entrepreneurship development expert, wrote from Asaba