The Federal Government has defended President Bola Tinubu’s proposed $21.7 billion external borrowing plan, saying the funds are intended to finance infrastructure and other productive assets rather than recurrent expenditure.
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, gave the explanation after Wednesday’s Federal Executive Council (FEC) meeting at the Presidential Villa in Abuja.
According to Channels Television, Oyedele said the proposed borrowing plan covered approximately five years and should not be interpreted as an immediate drawdown of the entire amount.
He maintained that the loans would support investments capable of generating long-term economic value for Nigeria.
$10.6bn Earmarked for Transport Infrastructure
Oyedele said $10.6 billion of the proposed borrowing would be allocated to major transport infrastructure projects, including the Sokoto-Badagry Highway, Lagos-Calabar Coastal Highway and Kano-Kaduna Metro Rail.
He also disclosed that more than $7.9 billion would come from multilateral and bilateral development partners, led by a proposed $5 billion facility from the World Bank.
According to the minister, the development financing carries an average interest rate of approximately 2.1 per cent.
The proposed package also includes $3.3 billion for state government projects and an additional $1.45 billion for projects in the Federal Capital Territory.
Defending the borrowing strategy, Oyedele argued that loans used to finance productive infrastructure could create lasting economic value, unlike borrowing for consumption.
He said investments that generate assets worth more than their financing costs could contribute to national wealth creation.
FG Highlights Education and Household Support
The finance minister also outlined government intervention programmes aimed at ensuring that macroeconomic improvements translate into tangible benefits for Nigerians.
He disclosed that the Nigerian Education Loan Fund (NELFUND) had disbursed ₦372.6 billion to more than 1.5 million students.
Oyedele further said over ₦600 billion had been distributed to 10 million households, with plans to expand the programme to reach 15 million vulnerable families.
He added that more than 800,000 micro, small and medium-sized enterprises (MSMEs) had benefited from single-digit interest loans through the Bank of Industry.
The minister also confirmed that the Federal Executive Council had adopted the 90-day execution framework established by the National Economic Council, alongside a commitment to maintaining fiscal discipline.
FEC Approves Power and Railway Financing
Meanwhile, the Federal Executive Council approved 10 memoranda submitted by Oyedele, including financing arrangements for electricity infrastructure, railway operations and road construction.
Among the approvals was a €155.9 million credit facility arranged by Deutsche Bank to construct five new 132/33kV substations under Phase One of the Presidential Power Initiative.
The project is intended to improve electricity supply stability and reduce energy costs.
The council also approved a $970 million syndicated 10-year facility led by Standard Chartered Bank and the Africa Finance Corporation for rolling stock on the Kano-Maradi railway line.
The railway investment is expected to support regional trade and reduce freight transportation costs.
Another approval was a €76.8 million credit facility from the ECOWAS Bank for Investment and Development for Bauchi State. The funding will support urban and rural road networks, including routes connecting farming communities to markets.
FG Approves Cargo Inspection Scanners
On border security and trade facilitation, Oyedele said the council approved investment in non-intrusive cargo inspection scanners for the Nigeria Customs Service.
The equipment is intended to speed up cargo clearance at ports, combat smuggling and help prevent illicit arms trafficking.
The approvals form part of the government’s broader efforts to improve infrastructure, strengthen trade and support economic activity.
The proposed $21.7 billion external borrowing plan, however, remains subject to the relevant legislative process at the National Assembly.
