$21.7bn borrowing to fund infrastructure, not consumption, says Oyedele

The federal government has defended its proposed $21.7bn external borrowing programme, saying the funds will be channelled into infrastructure and other productive investments expected to drive economic growth and improve Nigerians’ living standards.

The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, gave the explanation on Wednesday while briefing State House correspondents after the Federal Executive Council meeting presided over by President Bola Tinubu at the Presidential Villa, Abuja.

Oyedele also said the government was targeting single-digit inflation by the end of 2027, or earlier, as it seeks to consolidate the gains of its economic reforms.

Defending the proposed borrowing request before the National Assembly, the minister said the loans should be assessed based on the economic value of the projects they would finance rather than the amount involved.

“This is investment, not borrowing,” he said.

According to him, the proposed financing would support projects across transportation, security, healthcare, agriculture, energy, digital infrastructure, education and social welfare.

He disclosed that about $10.6bn would be allocated to transportation infrastructure, including the Sokoto–Badagry and Lagos–Calabar coastal highways and the Kano–Kaduna railway corridor.

The minister said the government was pursuing funding from multilateral institutions and bilateral development partners to finance priority projects while keeping borrowing costs manageable.

He put the proposed multilateral and bilateral financing component at about $7.9bn, including a $5bn World Bank facility expected to attract an average interest rate of approximately 2.1 per cent.