​$21.7bn Borrowing Plan Is Investment In Assets, Not For Consumption, Says FG

The Federal Government has said that the $21.7 billion borrowing proposal transmitted to the National Assembly by President Bola Tinubu is an investment in assets and not for spending.

Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, stated this shortly after the Federal Executive Council Meeting at the Presidential Villa in Abuja.

Oyedele, who addressed public commentary regarding the draft external borrowing plan submitted to the National Assembly, clarified that the proposed $21.7 billion plan represented a multi-year investment plan spanning roughly five years rather than an immediate drawdown.

He said $10.6 billion of the money was slated for critical transport links, including the Sokoto–Badagry Highway, Lagos–Calabar Coastal Highway, and the Kano–Kaduna Metro Rail.

He said that over $7.9 billion of the loan will be sourced from multilateral and bilateral development partners (led by $5 billion from the World Bank) at an average interest rate of just ~2.1 per cent.

​Out of the overall package, Oyedele said $3.3 billion is earmarked directly for state government projects, with an additional $1.45 billion set aside for the Federal Capital Territory (FCT).

​”Borrowing to consume is harmful, but borrowing ₦1 to build transformative assets worth more than ₦1 creates net positive wealth for the country,” Oyedele argued, comparing the government’s approach to strategic corporate financing.

​Reiterating that macroeconomic recovery must translate into microeconomic relief, the minister highlighted several direct social intervention milestones including a total sum of ₦372.6 billion disbursed under the Nigerian Education Loan Fund (NELFUND) to over 1.5 million students; over ₦600 billion distributed to 10 million households, with expansion plans targeting 15 million vulnerable families; and single-digit interest loans provided to over 800,000 MSMEs through the Bank of Industry (BOI).

​Speaking further, the finance minister affirmed that the Federal Executive Council fully adopted the 90-day execution framework established by the National Economic Council (NEC) and pledged strict fiscal discipline.

Meanwhile, the Federal Executive Council gave approval to 10 memos submitted by Oyedele.

Highlighting four major approvals among the 10, he said a €155.9 million credit facility arranged by Deutsche Bank was approved by FEC to construct five new 132/33kV substations under Phase 1 of the Presidential Power Initiative (PPI), aiming to stabilise grid supply and lower energy costs.

​Also, a $970 million syndicated 10-year facility led by Standard Chartered Bank and the Africa Finance Corporation (AFC) was approved for rolling stock on the Kano–Maradi rail line to drive regional trade and lower freight costs.

Oyedele said ​FEC also approved a €76.8 million credit from the ECOWAS Bank for Investment and Development (EBID) granted to Bauchi State for urban-rural road networks and farm-to-market transit corridors.

On border security and trade facilitation, Oyedele said ​the FEC approved direct investment in non-intrusive cargo inspection scanners for the Nigeria Customs Service to accelerate port clearance, combat smuggling, and stop illicit arms trafficking.