The Federal Government has defended its proposed $21.7 billion external borrowing plan, insisting that the funds are intended to finance productive assets and infrastructure rather than ordinary government consumption.

The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, made the clarification after Wednesday’s Federal Executive Council meeting at the Presidential Villa in Abuja.

Oyedele addressed public concerns surrounding the external borrowing proposal submitted to the National Assembly by President Bola Tinubu, explaining that the plan represents a multi-year investment programme spanning approximately five years rather than an immediate withdrawal of the entire amount.

According to the minister, the proposed financing is designed to support projects capable of strengthening national productivity, stimulating economic growth and generating long-term value for Nigeria.

He argued that the borrowing proposal should be assessed based on the assets it would create and the economic benefits expected from those investments, rather than being viewed solely as an increase in the country’s debt.

“Borrowing to consume is harmful, but borrowing ₦1 to build transformative assets worth more than ₦1 creates net positive wealth for the country,” Oyedele said.

Transport Infrastructure to Receive $10.6 Billion

The finance minister disclosed that approximately $10.6 billion from the proposed financing would be allocated to major transportation infrastructure projects.

These include the Sokoto–Badagry Highway, the Lagos–Calabar Coastal Highway and the Kano–Kaduna rail project.

The government considers these projects important to improving connectivity, facilitating the movement of goods and passengers, reducing transportation difficulties and supporting commercial activities across different parts of the country.

The proposed investments are also expected to strengthen links between economic centres and improve access to markets, potentially supporting businesses and creating opportunities for employment.

Oyedele explained that the broader financing arrangement would draw on several sources, including multilateral and bilateral development partners.

More than $7.9 billion is expected to come from these development partners, with the World Bank accounting for a significant portion of the proposed financing.

According to the minister, approximately $5 billion in World Bank financing would carry an average interest rate of about 2.1 per cent.

He maintained that obtaining financing on favourable terms would help reduce borrowing costs while enabling the government to implement projects expected to deliver long-term economic benefits.

State Governments and the FCT to Benefit

Oyedele said the proposed borrowing package also includes funding for projects to be implemented by subnational governments.

Approximately $3.3 billion has been earmarked for state government projects, while another $1.45 billion is intended for the Federal Capital Territory.

The allocation reflects the government’s intention to distribute investments across different levels of administration and support infrastructure and development programmes beyond the federal level.

The minister’s explanation came amid wider public debate over the size of Nigeria’s proposed external borrowing and the implications for the country’s debt obligations.

The financing proposal comprises approximately $20.52 billion and €1.045 billion for projects and programmes across sectors that include transportation, security, healthcare, agriculture, energy, education, digital infrastructure and social protection.

The proposal still requires the necessary legislative approval, and the government’s explanation of its intended uses does not mean the entire amount has already been borrowed or disbursed.

Government Highlights Social Intervention Programmes

Oyedele also highlighted social intervention programmes intended to ensure that economic recovery translates into tangible improvements in Nigerians’ living conditions.

He disclosed that the Nigerian Education Loan Fund (NELFUND) had disbursed ₦372.6 billion to more than 1.5 million students.

The programme is designed to improve access to higher education by providing financial assistance to eligible students who might otherwise struggle to meet educational expenses.

The minister further stated that more than ₦600 billion had been distributed to 10 million households through government cash-transfer interventions. He added that the government planned to expand the programme to reach 15 million vulnerable families.

The administration has presented the transfers as part of its efforts to cushion the effects of economic reforms on households facing financial difficulties.

Oyedele also reported that more than 800,000 micro, small and medium-sized enterprises had received loans at single-digit interest rates through the Bank of Industry.

The financing is intended to support business operations, encourage investment and help smaller enterprises expand their activities.

The minister stressed that macroeconomic improvements must translate into practical benefits for households and businesses, rather than remaining limited to headline economic indicators.

Federal Government Pledges Fiscal Discipline

The finance minister reaffirmed the government’s commitment to fiscal discipline and effective implementation of its economic policies.

He said the Federal Executive Council had fully adopted the 90-day execution framework established by the National Economic Council.

The framework is intended to strengthen implementation, improve coordination and ensure that agreed government priorities translate into measurable results.

Oyedele’s remarks came as the administration continued to defend its economic reforms and proposed infrastructure investments amid questions about borrowing levels, repayment obligations and the need for greater transparency.

The Federal Executive Council also approved 10 memoranda submitted by the finance minister during the meeting.

The government maintains that the proposed external financing will support productive investment and create assets capable of delivering benefits over several years. However, the eventual impact will depend on the approval of the borrowing plan, the terms of the loans, the implementation of the projects and the economic returns they generate.