The Federal Government has defended President Bola Tinubu’s proposed 21.7-billion-dollar external borrowing plan, insisting that the funds are designed to finance long-term infrastructure and development projects rather than recurrent expenditure.
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, explained that the proposal is a multi-year investment programme spanning about five years and does not imply an immediate drawdown of the entire amount.
Oyedele said 10.6 billion dollars would be allocated to major transport projects, including the Sokoto–Badagry Highway, Lagos–Calabar Coastal Highway and Kano–Kaduna Metro Rail.
He added that more than 7.9 billion dollars of the proposed financing would come from multilateral and bilateral development partners, with a five-billion-dollar World Bank facility leading the package at an average interest rate of about 2.1 per cent.
According to the minister, 3.3 billion dollars is earmarked for projects by state governments, while 1.45 billion dollars is allocated to the Federal Capital Territory.
Oyedele maintained that borrowing for productive investments could generate long-term economic benefits, arguing that infrastructure development would create assets capable of delivering value beyond the cost of the loans.
The Federal Executive Council has also approved several financing arrangements, including a 155.9-million-euro Deutsche Bank facility for five electricity substations under the Presidential Power Initiative.
Another approval is a 970-million-dollar, 10-year facility for rolling stock on the Kano–Maradi rail line.
Other projects include a 76.8-million-euro ECOWAS Bank facility for urban and rural road networks in Bauchi State, as well as investments in cargo inspection scanners for the Nigeria Customs Service to improve port clearance, combat smuggling and strengthen border security.
The minister assured that the government would maintain fiscal discipline in implementing the projects, with the aim of translating economic recovery into tangible benefits for households and businesses.
