The Federal Government on Wednesday defended its $21.7bn supplementary external borrowing plan submitted to the National Assembly, describing it as a strategic investment programme rather than mere debt accumulation.
It also disclosed that the previous administration had printed over ₦30tn, equivalent to more than $20bn at the time, adding that Nigeria was still experiencing the inflationary impact of the monetary expansion.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, made the remarks while briefing State House correspondents after the Federal Executive Council meeting presided over by President Bola Tinubu at the State House, Abuja.
Oyedele, who spoke extensively on the state of the economy, said he presented 10 memoranda, all of which were approved by the council.
Among the approvals was a €155.9m credit facility from Deutsche Bank and other banks to upgrade 132/33kV substations under Phase One of the Presidential Power Initiative. The minister said the intervention would improve electricity reliability for homes and businesses while reducing energy costs.
The council also approved a $970m syndicated term loan from Standard Chartered and the Africa Finance Corporation for rolling stock on the Karu–Maradi rail line. According to Oyedele, the project is intended to boost freight transportation, regional trade and the Northern Economic Corridor while reducing logistics costs.
Another approval was a €76.8m credit facility from the ECOWAS Bank for Investment and Development for Bauchi State’s Transport Infrastructure Development Programme, covering rural and urban roads and farm-to-market access routes to support food security.
The council also approved investment in non-intrusive inspection scanners for the Nigeria Customs Service to accelerate cargo clearance, reduce smuggling and misdeclaration, and improve the detection of contraband and small arms.
Explaining the approvals, Oyedele said, “As I said, there were 10 of them. I’ll just briefly speak to about four of them. One of them was a 155.9 million euro credit from Deutsche Bank and some other banks directed at upgrading about 132/33 kV substations and a few other ones. There are five of them, actually, five new ones under the Presidential Power Initiative Phase One. Essentially, this is a government intervention that will help ensure more reliable power for homes and businesses and lower energy costs.
“Another memo was with respect to a $970m syndicated term loan by Standard Chartered and Africa Finance Corporation on rolling stock for the Karu–Maradi rail line. What is the essence of this? This will give us cheaper freight, regional trade, the Northern Economic Corridor and lower prices for logistics, inflation and price levels.
“Another one was 76.8 million euros. This is from the ECOWAS Bank, and it is credit to Bauchi State for the Transport Infrastructure Development Programme, and this is going to help us with rural and urban roads, and to build farm-to-market access roads that will help with food security.
“And finally, council approved the investment in a non-intrusive inspection scanner for technical support, repairs, and maintenance to the Nigeria Customs Service. What is the essence of this? It will help with faster cargo clearance, less smuggling, and less misclassification. And we can then detect when some evil people want to bring in contraband and dangerous small weapons to our country.”
On the $21.7bn supplementary external borrowing plan submitted to the National Assembly, Oyedele rejected criticisms that the administration was merely accumulating debt, insisting that the proposed financing was intended for critical infrastructure and economic development.
“So, another part of this presentation is on the borrowing plan that was presented to the National Assembly. Altogether, if you convert the euro amount and add it to the dollar amount, it comes to $21.7bn. And we’ve seen some people with commentary saying that we are borrowing X, Y, Z.
“I’m pleased and excited to inform you that actually this does not qualify as borrowing. This qualifies as investment, and I will explain that to you in the next few minutes. Now, so what is this all about? This is an amount or a plan.
“First and foremost, this is a plan. It doesn’t even mean that we borrow all of it. So it’s a plan. The average lifespan of the project under this plan is five years, by the way. So, this means countries need to plan. You can’t be doing everything based on spontaneity and randomness. Now, these amounts, about $10.6bn out of it, are for investment in transportation infrastructure,” he explained.
According to the borrowing plan, the proposed financing covers 46 projects across 11 sectors, with 29 projects structured on concessional or blended financing terms.
Transportation accounts for $10.6bn, including sections of the Lagos–Calabar and Sokoto–Badagry highways and the Kano–Kaduna Metro Rail.
Ten flagship projects account for 58 per cent of the total financing plan, amounting to $12.5bn.
Projects in the social sectors, agriculture, energy, social protection, climate and education, valued at $4bn, are expected to be financed entirely on concessional terms.
The document indicates that approximately $7.9bn will come from multilateral and bilateral development partners, with the World Bank providing $5bn at an average interest rate of 2.1 per cent.
The remaining financing will come from 11 lender groups, including regional development finance institutions, export credit agencies and commercial banks.
For the commercial component, the average indicative interest rate is 7.8 per cent, below the 9.1 to 9.6 per cent yield on Nigeria’s November 2025 Eurobond.
Oyedele attributed the difference to improvements in Nigeria’s credit ratings by Fitch, Moody’s and S&P.
He explained that $4.8bn of the total financing was earmarked for subnational governments and agencies, with $3.3bn going directly to states and $1.45bn channelled through agencies and development finance institutions.
The institutions include the Bank of Industry, Development Bank of Nigeria, Transmission Company of Nigeria and electricity distribution companies.
“The Federal Government has the constitutional duty to be the interface for all external borrowing. So when people say we are borrowing $21.7bn, they need to know that a significant chunk is for states, the FCT, and agencies, not for the Federal Government alone,” he said.
Drawing a comparison with private-sector financing, Oyedele argued that borrowing could be beneficial when the returns generated exceeded the cost of financing.
“If Aliko Dangote was going to save money to build his refinery, it would not have been built in his lifetime. He had to take the financing to make it happen. $20bn is now listed in less than four years, and the value has more than doubled. This is exactly what we are doing for our country.
“There are people who will tell you borrowing is bad. You just need to ask them: in which country on this planet do you run an economy without borrowing? To the extent that you borrow one naira to create value of more than one naira, you should please borrow more.”
On food price stability, which the council adopted as a priority, Oyedele said the Federal Government was pursuing a national strategy in collaboration with state governments under the National Economic Council’s 90-day action plan.
“The short term is to ensure that in the coming months, leading up to the end of the year, the price of the most important staple items, rice, yam, beans, maize, remains stable or comes down,” he said.
He explained that the government would assess the gap between domestic food consumption and local production to determine the need for targeted imports.
According to him, only unprocessed brown rice would be imported to protect local milling jobs and processing capacity.
Over the medium and long term, the government plans to expand irrigation farming to support year-round agricultural production, improve crop yields through scientific methods and reduce post-harvest losses.
“We will not only be food sufficient; prices will be stable and affordable, and we will export, and a lot of it will be processed before we export. There is nothing that says people cannot be rich doing farming. This is the level we are getting into,” Oyedele said.
Speaking on the state of the economy inherited by the Tinubu administration in May 2023, the minister claimed that Nigeria had been only weeks away from a full economic collapse.
He said, “Inflation was at 22.41 per cent, and our reserve was net of $859m, not even enough to cover one month of imports. We had a spread between the official rate and the parallel rate of over 60 per cent premium, enabling round-tripping by the highly connected, while businesses, including manufacturers, could no longer access foreign exchange.
“We had printed altogether over N30tn to spend, and the impact of that amount, at the time, this was more than $20bn, is what we are dealing with today in inflationary pressure. Debt service at the time was consuming 97 per cent of revenue, nearly 100 per cent, and about 27 states could no longer reliably pay salaries. They were owing arrears of pension and gratuities.”
Oyedele maintained that without the administration’s economic reforms, Nigeria could have experienced hyperinflation and a complete currency collapse more severe than the depreciation already recorded.
On the removal of petrol subsidies, he traced the policy to 1973, noting that a litre of premium motor spirit sold for six kobo at the time and ₦195 when the subsidy was removed in 2023.
He said the increase represented a 3,050-fold rise over 50 years without resolving the underlying challenges.
“Each time we increased the PMS price, Nigerian people suffered for it, but no benefit came. This is the first time in that half-century that the problem has now been solved, and the benefits are now accruing to our country,” he said.
The minister also stated that Nigeria’s economic growth had accelerated from 2.74 per cent in May 2023 to 4.43 per cent in the second quarter of 2026, representing an improvement of more than 60 per cent.
He added that the country’s dollar-denominated growth rate stood at 17 per cent in the first half of 2026, placing it among the world’s fastest-growing economies.
“This is the reason why we are classified by the IMF as one of the top 10 countries in the world contributing to global GDP growth,” he said.
On inflation, Oyedele said the September 2026 rate of 14.63 per cent represented a decline from 20.98 per cent a year earlier and from a peak of approximately 34 per cent.
He added that month-on-month food inflation had fallen by 1.55 per cent, describing the development as deflation in food prices.
The minister further disclosed that Nigeria’s foreign reserves had risen to an 18-year high of more than $55bn, with net reserves exceeding $45bn, compared with less than $1bn three years earlier.
According to him, the naira, which was trading between ₦1,330 and ₦1,350 to the dollar, was expected to appreciate further.
“Even the IMF estimates that the naira is about 25 per cent undervalued. So anybody who wants to bet against the naira should make provision for their losses. The currency to hold is the naira, even more than the US dollar or pound sterling,” Oyedele said.
He stated that Nigeria’s tax-to-GDP ratio had increased from approximately seven per cent in 2023 to 12.5 per cent at the end of 2025.
The debt-service-to-revenue ratio, he said, had declined from 97 per cent to below 60 per cent and was continuing to fall.
Oyedele also disclosed that Federation Account allocations increased by 44 per cent between 2024 and 2025, with a projected increase of 50 per cent between 2025 and 2026.
He said the real growth rate, after adjusting for inflation, exceeded 80 per cent over the two-year period.
On Nigeria’s international economic standing, the minister said Fitch, Moody’s and S&P had upgraded the country’s credit ratings, while their outlooks had recently improved from stable to positive.
He added that Nigeria had exited the Financial Action Task Force grey list and the European Union’s deficiency list.
Addressing concerns about the gap between improvements in economic indicators and the living conditions of ordinary Nigerians, Oyedele highlighted several government intervention programmes.
“To date, we have N372.6bn disbursed through NELFUND to more than 1.5 million students, which means their parents and guardians do not have to worry about tuition and stipend. We have more than 10 million households that have received cash transfers worth more than N600bn, and the target is to reach at least 15 million households,” he said.
He disclosed that more than 800,000 micro, small and medium enterprises had received subsidised loans at single-digit interest rates, mainly through the Bank of Industry.
The minister added that low-income earners receiving up to ₦100,000 monthly had been exempted from personal income tax.
He also stated that small businesses with annual turnover not exceeding ₦100m, representing approximately 97 per cent of more than 40 million small businesses, were exempted from corporate income tax, VAT obligations and withholding tax deductions.
Oyedele further noted that the capital market had grown from approximately ₦30tn to more than ₦160tn within three years, representing an increase of more than fivefold.
He said over 90 per cent of capital market investors were small investors who had benefited from capital gains tax exemptions.
According to the minister, the Federal Executive Council adopted a resolution to pursue single-digit inflation by the end of 2027 or earlier, stabilise and reduce food prices, and maintain fiscal discipline throughout the election cycle.
Oyedele’s defence of the borrowing plan followed criticism of President Tinubu’s request to the National Assembly for approval of the proposed external loans.
Among those who criticised the proposal were the African Democratic Congress presidential candidate, Atiku Abubakar, and the Makinde/Daura Campaign Council.
On Tuesday, Atiku urged the National Assembly to suspend consideration of the borrowing request until the Federal Government publicly disclosed the projects the proposed loans were intended to finance.
Post Title: “This Does Not Qualify As Borrowing, It Qualifies As Investment” — Finance Minister Oyedele Defends FG’s $21.7bn External Loan Plan By Naijaonpoint.