The Federal Government has defended its proposed $21.7 billion external borrowing plan against criticism from former Vice President Atiku Abubakar and former Anambra State Governor Peter Obi, insisting that the funds are intended for productive investments rather than consumption.
The government also announced plans to reduce inflation to single digits by the end of 2027, present the 2027 Appropriation Bill before the end of this year and undertake eight road projects valued at ₦594.49 billion across the country.
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed these developments while briefing journalists after Wednesday’s Federal Executive Council (FEC) meeting, presided over by President Bola Tinubu at the State House, Abuja.
Responding to criticism of the borrowing proposal, Oyedele maintained that the financing should be evaluated according to the infrastructure and economic opportunities it would create, rather than solely by its contribution to Nigeria’s debt stock.
He explained that the package, comprising $20.52 billion and €1.045 billion, was designed to finance projects in transportation, security, healthcare, agriculture, energy, digital infrastructure, education and social protection.
The minister stressed that approval of the borrowing plan did not mean the government had already obtained the entire amount or would necessarily draw down all the proposed facilities.
“Altogether, if you convert the euro amount and add it to the dollar amount, it will come up to $21.7bn. And we’ve seen some people with commentary saying that we are borrowing X, Y, Z,” he said.
“This is an amount or a plan. First and foremost, this is a plan. Doesn’t mean that we have borrowed. It doesn’t even mean that we borrow all of it.”
Oyedele described the proposed borrowing as an investment programme, explaining that the projects had an average implementation period of five years and were expected to generate long-term economic benefits.
According to him, transportation infrastructure accounts for approximately $10.6 billion of the proposed financing, covering major projects including the Sokoto-Badagry and Lagos-Calabar highways and the Kano-Kaduna railway.
He said the government was seeking funding from multilateral and bilateral development partners, with approximately $7.9 billion expected from development institutions.
The minister disclosed that a $5 billion World Bank component would attract concessional financing at an average interest rate of approximately 2.1 per cent, while certain social-sector facilities would carry rates of about two per cent.
He maintained that the administration was prioritising favourable financing terms to minimise borrowing costs and ensure that the projects delivered lasting economic value.
On inflation, Oyedele said the government was intensifying efforts to achieve a single-digit rate by the end of 2027.
He cited a decline in inflation to 14.63 per cent in September, compared with 20.98 per cent in the corresponding period of the previous year and an earlier peak of approximately 34 per cent.
According to the minister, FEC resolved to sustain measures aimed at reducing prices, particularly food prices, while expanding investments in infrastructure, human capital development and employment creation.
Oyedele also reported improvements in Nigeria’s external reserves, saying gross foreign exchange reserves had exceeded $55 billion, which he described as their highest level in 18 years.
He added that net reserves had risen above $45 billion from less than $1 billion three years earlier.
The minister put economic growth at 4.43 per cent in the second quarter, compared with 2.74 per cent in May 2023.
He further disclosed that Nigeria’s tax-to-GDP ratio had increased from approximately seven per cent in 2023 to 12.5 per cent by the end of 2025, while the debt-service-to-revenue ratio had declined from 97 per cent to below 60 per cent.
Oyedele attributed the changes to what he described as improvements in the government’s fiscal management and broader economic reforms.
Defending the removal of petrol subsidy, the minister argued that successive increases in petrol prices over several decades had failed to address structural problems associated with the subsidy regime.
He maintained that the previous arrangement placed an unsustainable burden on public finances and limited the government’s capacity to invest in infrastructure and essential services.
According to Oyedele, the administration had introduced targeted social interventions to cushion the effects of its reforms on vulnerable households and businesses.
He disclosed that more than 10 million households had received over ₦600 billion in cash transfers, while the Nigerian Education Loan Fund had disbursed ₦372.6 billion to more than 1.5 million students.
The minister added that over 800,000 micro, small and medium-sized enterprises had benefited from subsidised loans at single-digit interest rates.
On taxation, Oyedele said individuals earning up to ₦100,000 monthly were exempt from personal income tax under the government’s reforms.
He also stated that qualifying businesses with annual turnover not exceeding ₦100 million enjoyed exemptions from corporate income tax, value-added tax and withholding tax.
The minister further reported that the Nigerian capital market had expanded from approximately ₦30 trillion to more than ₦160 trillion, expressing optimism about the naira’s outlook amid stronger foreign reserves and improving economic conditions.
Meanwhile, the Federal Government assured Nigerians that preparations were underway for the timely submission of the 2027 budget.
Minister of State for Budget, Dr Doris Uzoka-Anite, who also briefed journalists after the FEC meeting, said the administration intended to present the proposed Appropriation Bill to the National Assembly before the end of 2026.
“We are working on the 2027 budget, and our intention is to present it before the end of the year,” she said.
The planned submission is expected to provide lawmakers with sufficient time to examine the government’s fiscal proposals ahead of the 2027 financial year.
Details of the budget, including projected expenditure, revenue estimates, deficit financing and sectoral allocations, have yet to be announced.
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Deji Elumoye, Abuja
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