The Federal Government has defended President Bola Ahmed Tinubu’s proposed $21.7 billion supplementary external borrowing plan for 2026–2027, revealing that $13 billion (60 percent) will directly fund mega transport highways, rail networks, and defence hardware.
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, clarified on Wednesday that the request submitted to the Senate Committee on Foreign Loans is a legislative financing framework, not an immediate debt draw-down.
“First and foremost, this is a plan. It doesn’t mean that we have borrowed. It doesn’t even mean that we will borrow all of it,” Oyedele said. “Every single naira of these is an investment. If you borrow $20 billion and use it to create assets and wealth whose benefit exceeds $20 billion, what you’ve actually done is created a net asset.”
Transport and Defence Take Center Stage
A breakdown provided by the Ministry of Finance shows that transport infrastructure accounts for the largest share at $10.6 billion (49 percent), while defence and security will receive $2.4 billion (11 percent).
Key transport projects slated for funding include:
Lagos–Calabar Coastal Highway: Sections 2, 3, 4, and 5.
Sokoto–Badagry Highway: Kebbi Section 2 and Section 3.
Rail Networks: Kano–Kaduna metro rail and rolling stock for the Kano–Maradi line.
Feeder & Urban Roads: FCT Northern Parkway alongside a €76.8 million ECOWAS Bank facility for farm-to-market and rural roads across states.
The entire $2.4 billion defence allocation—which covers air capability acquisitions (including M-346 aircraft), security surveillance, and a new Defence Headquarters—will be funded on commercial terms.
Financing Mix and Interest Rates
The $21.7 billion package mixes commercial, concessional, and blended facilities across 11 lender groups, with the Federal Government accounting for $16.7 billion (77 percent) and state governments receiving $3.3 billion (15 percent).
Commercial Facilities ($13.8 billion / 64%): Spread across 17 projects with an average indicative rate of 7.8 percent (ranging between 4.3 and 10 percent). The ministry noted these terms compare favorably with yields on Nigeria’s Eurobonds following recent credit rating upgrades by Fitch, Moody’s, and S&P.
Concessional Loans ($6.2 billion / 28%): Averaging 2.1 percent interest across 27 projects. The World Bank is the largest single contributor ($5 billion), alongside the Islamic Development Bank ($1 billion) and African Development Bank ($600 million).
Blended Funding ($1.8 billion / 8%): Combining IDA and IBRD resources at an average rate of 4.2 percent.
Agriculture, health, energy, social protection, and education projects ($4 billion combined) will be funded exclusively through low-interest concessional windows.
Power Infrastructure and Customs Modernization
Oyedele disclosed that the FEC approved 10 major memoranda, including a €155.9 million credit facility from Deutsche Bank for electricity substation upgrades under the Presidential Power Initiative (PPI) and a $70 million syndicated loan via Standard Chartered and the Africa Finance Corporation for rail rolling stock.
To accelerate cargo clearance and curb contraband smuggling, the council also approved investments in non-intrusive inspection scanners and maintenance for the Nigeria Customs Service.
Food Price Interventions and Brown Rice Policy
Addressing rising food costs, Oyedele stated that the government is partnering with states on targeted short- and long-term interventions for staples like maize, yam, beans, and rice.
To protect domestic millers while closing supply gaps, the government has instituted a strict import restriction.
“We are not going to import polished or refined rice. We’re going to bring in brown rice so that we can process it locally,” Oyedele affirmed, adding that long-term strategies will focus on expanding irrigation for year-round farming and curbing post-harvest losses.
