FG Defends $21.7bn Borrowing Plan, Cites Infrastructure Needs

The Federal Government has defended its proposed $21.7bn external borrowing plan, describing it as an investment in infrastructure and economic development rather than simply an addition to Nigeria’s debt burden. Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, gave the explanation on Wednesday after the Federal Executive Council meeting presided over by President Bola Tinubu at the State House, Abuja. Oyedele said the proposed financing would support 46 projects across 11 sectors, including transportation, power, healthcare, agriculture, education, security and social protection. He maintained that the borrowing plan should be assessed based on the productive assets it would create and the economic benefits expected from the projects. “This is investment, not borrowing,” the minister said, arguing that governments could use financing to build infrastructure and expand economic opportunities rather than depend entirely on available revenue. He also clarified that the proposal was a financing plan and did not mean the government would necessarily borrow the entire amount. According to the minister, the projects under the programme have an average lifespan of five years, while approximately $10.6bn would be allocated to transportation infrastructure. The proposed projects include sections of the Lagos-Calabar and Sokoto-Badagry highways, as well as the Kano-Kaduna railway project. Oyedele said the financing would come from multilateral and bilateral development partners, commercial lenders and other financial institutions. About $7.9bn is expected from multilateral and bilateral development partners, including a proposed $5bn component from the World Bank at an average interest rate of 2.1 per cent, according to the minister. He said the government was seeking favourable financing terms to reduce borrowing costs and improve the long-term value of the projects. The plan also includes funding for state governments and public agencies. Oyedele disclosed that approximately $4.8bn of the proposed amount was earmarked for subnational governments and agencies, with about $3.3bn intended for states and $1.45bn for agencies and development finance institutions. He argued that the entire amount should not be viewed as borrowing solely for the Federal Government, because some of the facilities would finance projects undertaken by other public institutions. ### Government Highlights Infrastructure Needs The minister cited Nigeria’s infrastructure deficit as a major reason for seeking external financing, noting that large-scale projects require substantial resources that cannot always be provided through annual budget allocations. He also pointed to the cost of commercial financing, saying the indicative average rate for the commercial component of the plan was about 7.8 per cent, compared with yields of between 9.1 and 9.6 per cent on Nigeria’s November 2025 Eurobond. Oyedele attributed the difference partly to improvements in the country’s international credit ratings. He further argued that borrowing could be justified when the economic value generated by a project exceeded the cost of financing it. However, the proposed plan has attracted criticism from opposition figures who have questioned the scale of the borrowing and the need for greater transparency. Former Vice-President Atiku Abubakar has urged the National Assembly to suspend consideration of the request until the government provides detailed information about the projects, their costs, locations and contractors. The concerns have placed greater emphasis on the need for lawmakers to examine the proposed facilities, repayment terms and expected economic returns before granting approval. ### FG Outlines Economic Measures Beyond the borrowing proposal, Oyedele discussed the government’s economic programme, including efforts to contain inflation, improve food availability and expand support for households and businesses. He said the administration was targeting single-digit inflation by the end of 2027 or earlier, while seeking to keep prices of essential food items stable or reduce them in the coming months. The minister also cited government interventions, including student loans, cash transfers to vulnerable households and subsidised financing for small businesses, as measures intended to cushion the effects of economic reforms. He reported that Nigeria’s foreign reserves had risen above $55bn and that economic growth reached 4.43 per cent in the second quarter of 2026. These figures represent the government’s account of recent economic performance. Their impact on household welfare and the sustainability of public finances remain important considerations in assessing the administration’s policies. The proposed external borrowing plan still requires legislative consideration. Its eventual approval, financing arrangements and implementation will determine how much is borrowed and whether the projects deliver the benefits outlined by the government.