The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has defended the Federal Government’s proposed $21.7bn external borrowing plan, saying the funds would finance productive projects capable of stimulating economic growth and improving living standards.
Oyedele made the remarks on Wednesday while responding to questions from State House correspondents after the Federal Executive Council meeting chaired by President Bola Tinubu at the Presidential Villa in Abuja.
He maintained that the proposed loans should be assessed based on the economic assets they would create and the returns expected from them, rather than simply as an increase in Nigeria’s debt.
“This is investment, not borrowing,” he said.
The minister added that the government was pursuing projects expected to boost productivity and deliver long-term economic benefits.
Tinubu had on Tuesday asked the National Assembly to approve an external borrowing request comprising $20.52bn and €1.04bn to finance projects and programmes across various sectors.
In a letter read by Senate President Godswill Akpabio during plenary, the President said the funds would support infrastructure development, agriculture, healthcare, education, water supply, security, job creation and financial management reforms.
He explained that the borrowing plan was intended to accelerate economic development and address the country’s infrastructure funding deficit.
However, former Vice-President Atiku Abubakar, the presidential candidate of the African Democratic Congress, called on the National Assembly to withhold approval of the proposal.
In a statement released on Tuesday by Phrank Shaibu, Director of Strategic Communication of the ADC Presidential Campaign Council, Atiku questioned the timing and objectives of the government’s request.
He said the proposal supported his October 12 warning that the Tinubu administration was preparing to borrow up to $20bn for the Lagos-Calabar coastal highway.
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Atiku also argued that the government had not disclosed adequate information about the projects, including their locations, costs and contractors, to allow Nigerians to scrutinise the planned expenditure.
He further raised concerns that the funds could benefit political campaigners and favoured contractors, citing reports that the Lagos-Calabar coastal highway had been redirected inland.
Addressing the concerns, Oyedele said the government was seeking financing from multilateral and bilateral development partners, alongside other sources, to execute the planned projects.
He disclosed that transportation infrastructure would receive about $10.6bn, covering major developments such as the Sokoto-Badagry and Lagos-Calabar highways and the Kano-Kaduna rail project.
According to the minister, approximately $7.9bn would come from multilateral and bilateral partners, including the World Bank.
He said a $5bn component from the World Bank would attract concessional financing at an average interest rate of about 2.1 per cent, while some loans for social sector projects would carry rates of around two per cent.
Oyedele said the government was prioritising favourable financing terms to minimise borrowing costs and ensure the projects deliver lasting economic benefits.
The minister also disclosed that the government was targeting single-digit inflation by the end of 2027 or earlier.