Nigeria defends $21.7 billion external borrowing plan as investment

Nigeria's government has defended its proposed $21.7 billion external borrowing programme, describing it as a long-term investment in infrastructure, human capital and economic growth rather than an additional debt burden. Finance Minister and Coordinating Minister of the Economy Taiwo Oyedele made the remarks while briefing State House correspondents after the Federal Executive Council meeting chaired by President Bola Tinubu at the Presidential Villa in Abuja.

Oyedele said the five-year project financing plan was designed to create productive assets whose long-term economic value would outweigh the cost of borrowing. He stressed that the proposal had been submitted to the National Assembly and did not mean the entire amount had already been borrowed or would necessarily be drawn down in full.

“This is investment, not borrowing.”

The plan covers critical investments in transportation, defence and security, health, agriculture, energy, digital infrastructure, small businesses, social protection, environmental protection and education. About $10.6 billion is earmarked for transportation infrastructure, including the Sokoto-Badagry and Lagos-Calabar coastal highways and the Kano-Kaduna Metro Rail project.

Approximately $4.8 billion of the proposed financing is allocated to projects involving state governments, the Federal Capital Territory and other subnational entities, agencies and development finance institutions. About $7.9 billion would come from multilateral and bilateral development partners, including $5 billion from the World Bank at concessional rates averaging 2.1 percent.

The indicative average interest rate on the commercial component is 7.8 percent, which Oyedele said is below the rate on Nigeria's November 2025 Eurobond. The government is acting as the coordinating authority for external financing covering federal, state and other public-sector projects.

Oyedele also said the government was working towards reducing inflation to a single-digit rate by the end of 2027 or sooner. He expressed confidence that the administration's economic reforms were beginning to yield tangible outcomes.