Minister of Finance and Coordinating Minister for the Economy, Dr Taiwo Oyedele, has defended the Federal Government’s proposed $21.7 billion external borrowing plan, saying the funds would finance investments capable of creating assets and wealth beyond the cost of the loans.
Oyedele said the request, presented to the National Assembly on Tuesday, did not mean the government had borrowed the money or would necessarily draw down the entire amount.
Briefing journalists at the State House, Abuja, on Wednesday after the Federal Executive Council (FEC) meeting presided over by President Bola Ahmed Tinubu, the minister said the plan’s projects had an average lifespan of five years.
“First and foremost, this is a plan. It doesn’t mean we have borrowed. It doesn’t even mean that we borrow all of it”, he said.
The minister argued that the proposal should be assessed on the value of the infrastructure and other investments it would deliver, rather than the size of the borrowing alone.
“Every single naira of these is an investment”, Oyedele said.
He explained that borrowing to create assets worth more than the amount obtained would leave the country better off.
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“If you borrow $20 billion and use it to create assets and wealth and benefit that is more than $20 billion, what you’ve actually done is you’ve created a net asset”, he said.
According to him, the combined dollar and euro components of the proposed financing amount to $21.7 billion.
Of this, about $10.6 billion is earmarked for transportation infrastructure, including the Sokoto-Badagry and Lagos-Calabar highways and the Kano-Kaduna metro rail.
Oyedele listed the other priority sectors as defence and security, health, agriculture, energy and power, digital infrastructure, finance and micro, small and medium enterprises, social protection, environment and education.
He said long-term planning was necessary to deliver major infrastructure, adding that the government could not undertake such investments through spontaneous decisions.
Drawing a comparison with private-sector financing, the minister said major investments such as the Dangote refinery showed why access to financing was necessary to build assets that accumulated savings alone could not realistically fund.
He expressed confidence that the proposed investments would generate substantial value for the country, with Nigerians as the ultimate beneficiaries.
On financing terms, Oyedele said the social sector components would be funded through concessional loans with average interest rates of about two per cent.
He listed the areas covered as energy, social protection, agriculture, climate, education and health.
The minister said multilateral and bilateral partners would provide about $7.9 billion, led by the World Bank with $5 billion.
He added that other financing sources included regional development finance institutions, export credit agencies and banks.
Oyedele put the average indicative interest rate on the commercial component at 7.8 per cent, saying it was below the rates on Nigeria’s November 2025 Eurobond.
“So, which means you’re getting a deal as a country, even on the commercial investment”, he said.
The minister also explained that the request was not exclusively for Federal Government projects, noting that the Federal Government serves as the interface for external borrowing.
He allocated $3.3 billion to states and the Federal Capital Territory, with another $1.45 billion for agencies and development finance institutions.
Together, he said, these accounted for approximately $4.8 billion of the proposed financing.
Oyedele maintained that borrowing should be judged by its purpose, terms and capacity to generate value.
“There are people who will tell you borrowing is bad, and you just need to ask them: In which country on this planet do you run the economy without borrowing?” he said.
Earlier, the minister said he presented 10 memoranda to Council, highlighting financing arrangements for power, rail, transport infrastructure, and customs operations.
Among them was a €155.9 million credit facility from Deutsche Bank and other banks for electricity substation projects under the Presidential Power Initiative.
He said the intervention would support more reliable electricity supply to homes and businesses and help lower energy costs.
Another was a $70 million syndicated term loan involving Standard Chartered and the Africa Finance Corporation for rolling stock on the Kano-Maradi rail line.
According to him, the investment would support cheaper freight, regional trade and economic activity along the northern corridor while reducing logistics costs.
He also highlighted a €76.8 million credit facility from the ECOWAS Bank for a state transport infrastructure development programme, including rural, urban and farm-to-market roads.
Council further approved investment in non-intrusive inspection scanners and related technical support, repairs and maintenance for the Nigeria Customs Service.
Oyedele said the equipment would speed up cargo clearance, curb smuggling, and improve the detection of contraband and dangerous weapons.
Responding to a question on food prices, the minister said the government was adopting a national approach involving the states and local governments, with measures covering the short, medium and long term.
The immediate objective, he said, was to keep the prices of major staples stable or bring them down in the coming months and through the end of the year.
He listed rice, yam, beans and maize among the commodities receiving attention.
Oyedele said the government would assess domestic consumption and production to identify supply gaps and determine the required import volume without discouraging local farmers.
He added that tariff levels would also be considered as part of the approach.
“We also agree we are not going to import polished or refined rice. We’re going to bring in brown rice so that we can also process it locally”, he said.
The minister said longer-term measures would focus on increasing yields, reducing post-harvest losses and expanding irrigation to support year-round farming.
“We will not only be food sufficient; price will be stable and affordable, and we will export”, Oyedele said.
