FG Defends $21.7bn Loan Plan Amid Debt Concerns

 

The Federal Government has defended its proposed $21.7 billion external borrowing plan, insisting that the funds will finance infrastructure and other productive investments capable of stimulating economic growth and improving Nigerians' living standards.

The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, gave the explanation after Wednesday's Federal Executive Council meeting presided over by President Bola Tinubu at the State House, Abuja.

Oyedele said the proposal, which comprises $20.52 billion and €1.045 billion, represents a multi-year financing plan for projects across transportation, security, healthcare, agriculture, energy, digital infrastructure, education and social protection.

He stressed that the proposal did not mean the government had already borrowed the entire amount or would necessarily draw down all the funds.

According to the minister, transportation infrastructure would account for approximately $10.6 billion, covering major projects such as the Sokoto-Badagry Highway, Lagos-Calabar Coastal Highway and Kano-Kaduna railway project.

He added that about $7.9 billion was expected from multilateral and bilateral development partners, including a proposed $5 billion component from the World Bank, with the financing expected to attract relatively favourable interest rates.

The government’s defence comes amid criticism from opposition figures, including former Vice-President Atiku Abubakar and Peter Obi, over the implications of additional external borrowing for Nigeria's debt burden.

Oyedele argued that the proposal should be assessed by the value of the assets to be created and the economic returns expected from the projects rather than being viewed solely as an increase in public debt.

He also said the government was targeting a reduction in inflation to single digits by the end of 2027.

However, the proposed borrowing still requires legislative consideration, while its ultimate impact will depend on the terms of the loans, project execution and the economic benefits delivered to Nigerians.