Oyedele defends $21.7bn borrowing plan as investment, not debt
- Finance Minister Taiwo Oyedele says the $21.7bn external borrowing plan is a five-year investment plan, not immediate debt.
- He spoke after the Federal Executive Council meeting chaired by President Bola Tinubu in Abuja.
- The plan faces criticism from Atiku Abubakar and Peter Obi over transparency and debt-servicing concerns.
The Federal Government has defended its proposed $21.7 billion external borrowing plan, saying the money is meant to build assets and not to fund consumption. Finance Minister and Coordinating Minister of the Economy Taiwo Oyedele made the case on Wednesday after the Federal Executive Council (FEC) meeting chaired by President Bola Tinubu at the Presidential Villa in Abuja.
Oyedele said the proposal is a five-year financing plan already sent to the National Assembly, and that it does not mean the full amount has been borrowed or will be drawn down at once. "This is investment, not borrowing," he told State House reporters.
The plan comprises $20.52 billion and €1.045 billion, covering transportation, defence and security, health, agriculture, energy, digital infrastructure, small businesses, social protection, the environment and education.
Where the money is going
About $10.6 billion is earmarked for transport, including the Sokoto-Badagry and Lagos-Calabar coastal highways and the Kano-Kaduna metro rail project.
Oyedele said roughly $7.9 billion would come from multilateral and bilateral partners, including $5 billion from the World Bank at concessional rates averaging 2.1 per cent. The commercial component carries an indicative average rate of 7.8 per cent, which he said is below Nigeria's November 2025 Eurobond rate.
He put $3.3 billion toward state government projects and $1.45 billion for the Federal Capital Territory, with the Federal Government acting as coordinating authority for federal, state and other public-sector financing.
Oyedele argued that borrowing can strengthen the country's balance sheet when the assets created are worth more than the cost of financing them. He compared the approach to the Dangote Refinery, saying big projects often need external funding to be completed on time.
Opposition and the economy
Former Vice President Atiku Abubakar has asked the National Assembly not to approve the loans until every project, cost, contractor, loan term and repayment obligation is published. He also questioned the timing ahead of the 2027 general election. Those allegations have not been established as fact.
Former Anambra governor Peter Obi has separately raised concerns about Nigeria's projected $11.6 billion debt-servicing bill for 2026, warning that repayments could squeeze spending on schools, hospitals and jobs.
Oyedele said the reforms since May 2023 had improved key indicators. He cited inflation falling to 14.63 per cent in September from 20.98 per cent a year earlier, growth of 4.43 per cent in the second quarter of 2026, and foreign reserves above $55 billion, with net reserves over $45 billion.
He said the naira had stabilised around ₦1,330 to ₦1,350 to the dollar, while the debt-service-to-revenue ratio fell from about 97 per cent to below 60 per cent. The FEC adopted a target of single-digit inflation by the end of 2027 or earlier, and backed the National Economic Council's 90-day plan to ease the cost of living.
On direct support, he said ₦372.6 billion had gone to over 1.5 million students through the Nigerian Education Loan Fund (NELFUND), more than ₦600 billion in cash transfers reached over 10 million households, and over 800,000 small businesses got single-digit loans through the Bank of Industry.
The FEC also approved a €155.9 million Deutsche Bank facility for five substations under Phase One of the Presidential Power Initiative, a $970 million Standard Chartered and Africa Finance Corporation loan for rolling stock on the Kano-Maradi rail line, a €76.8 million ECOWAS Bank for Investment and Development credit for Bauchi State roads, and cargo scanners for the Nigeria Customs Service.
Minister of State for Budget Doris Uzoka-Anite said the 2027 budget is being prepared for presentation before the end of 2026.
What happens next
The National Assembly will decide whether to approve the borrowing plan. Atiku's camp wants full project details published first, while the government says the plan will only draw funds as projects progress.
