The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, says the Federal Government’s proposed $21.7 billion external borrowing plan is intended to finance investments rather than place an additional burden on the country.
Oyedele spoke on Wednesday while responding to questions from State House correspondents after the Federal Executive Council (FEC) meeting, chaired by President Bola Tinubu at the Presidential Villa in Abuja.
He explained that the proposed loans would fund productive projects expected to stimulate economic growth and improve Nigerians’ living standards.
On Tuesday, Tinubu asked the National Assembly to approve external borrowing of $20.52 billion and €1.04 billion to finance projects and programmes across various sectors.
In a letter read by Senate President Godswill Akpabio during plenary, Tinubu said the proposed loans would support infrastructure, agriculture, healthcare, education, water supply, security, employment generation and financial management reforms.
He said the borrowing plan was intended to accelerate economic growth and address the country’s infrastructure funding gap.
However, Atiku Abubakar, presidential candidate of the African Democratic Congress (ADC), urged the National Assembly to reject the proposal.
In a statement issued on Tuesday by Phrank Shaibu, director of strategic communication for the ADC presidential campaign council, Atiku questioned the timing and purpose of the proposed borrowing.
The former vice-president said the request confirmed his October 12 warning that Tinubu was preparing to borrow up to $20 billion for the Lagos-Calabar coastal highway.
He argued that the President had not provided sufficient information about the projects to be financed, including their locations, costs and contractors, to allow Nigerians to scrutinise the proposed expenditure.
Atiku also raised concerns that the funds could be channelled to political campaigners and favoured contractors, citing reports that the coastal highway had been rerouted inland.
‘THIS IS INVESTMENT, NOT BORROWING’
Responding to Atiku’s concerns, Oyedele said the proposed financing should be evaluated based on the assets it would create and their expected economic returns, rather than being viewed simply as an increase in the country’s debt.
“This is investment, not borrowing,” he said.
The minister maintained that the government was seeking funds for projects that would boost national productivity and generate long-term economic value.
He also said the government was targeting single-digit inflation by the end of 2027 or earlier.
Under the proposed borrowing plan, transportation infrastructure accounts for approximately $10.6 billion. The projects include the Sokoto-Badagry and Lagos-Calabar highways, as well as the Kano-Kaduna rail project.
Oyedele said the government was seeking financing from multilateral and bilateral development partners, alongside other sources, to execute the projects.
He disclosed that about $7.9 billion was expected from multilateral and bilateral partners, including the World Bank.
According to the minister, a $5 billion World Bank component would attract concessional financing at an average interest rate of about 2.1 per cent, while some loans for social sector projects would carry interest rates of around two per cent.
He said the government was prioritising favourable financing terms to minimise borrowing costs and ensure the projects delivered lasting economic benefits.