Proposed $21.7bn Loan For Productive Investment, FG Replies Atiku, Obi

.Assures 2027 budget’ll be ready before December

Deji Elumoye in Abuja

The Presidency on Wednesday evening rose in stout defence of Federal Government’s proposed $21.7 billion external borrowing plan saying the loans are meant to finance productive investments that will drive economic growth and improve living standards of the citizens.
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, who spoke in the wake of the recent criticism of the proposed external borrowing by presidential candidate of the African Democratic Congress (ADC), Alhaji Atiku Abubakar and his Nigerian Democratic Congress (NDC) counterpart, Mr Peter Obi, explained that the loan financing should be assessed based on the assets to be created and economic returns expected, rather than being seen as an addition to the country’s debt burden.
The Minister, who addressed newsmen after the Federal Executive Council (FEC) meeting presided over by President Bola Tinubu at the State House, Abuja, also disclosed that government was targeting single-digit inflation latest by the end of 2027.
Answering questions about concerns about the borrowing plan, Oyedele said the government was seeking funds to finance projects that would strengthen national productivity and generate long-term economic value.
His words: “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. 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. Doesn’t mean that we have borrowed. It doesn’t even mean that we borrow all of it. So it’s a plan. The average lifespan of the projects under this plan is five years. This qualifies as investment. This is investment, not borrowing.”
The proposed financing comprises $20.52 billion and €1.045 billion for projects and programmes across transportation, security, healthcare, agriculture, energy, digital infrastructure, education and social protection.
Transportation infrastructure accounts for about $10.6 billion, covering major projects such as the Sokoto-Badagry and Lagos-Calabar highways and the Kano-Kaduna rail project.
The Finance Minister said government was pursuing financing from multilateral and bilateral development partners, alongside other sources, to implement the projects.
He explained that approximately $7.9 billion was expected from multilateral and bilateral partners, with the World Bank among the major institutions providing support.
According to him, a $5 billion World Bank component would attract concessional financing at an average interest rate of about 2.1 per cent, while some social-sector loans would carry rates of around two per cent.
Oyedele said government was prioritising favourable financing terms to reduce borrowing costs and ensure that the projects delivered lasting economic benefits.
Thrs Minister further stated that government was making progress towards stabilising the economy, with inflation declining to 14.63 per cent in September from 20.98 per cent in the corresponding period of the previous year and a peak of about 34 per cent.
He said the FEC had resolved to intensify efforts to bring down prices, particularly food prices, while sustaining investments in infrastructure, human capital development and job creation.
Oyedele also disclosed that Nigeria’s foreign reserves had risen above $55 billion, highest level in 18 years, while net reserves had increased to more than $45 billion from less than $1 billion three years ago.
He put economic growth at 4.43 per cent in the second quarter, compared with 2.74 per cent in May 2023.
According to him, the tax-to-GDP ratio had risen from about 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 also defended the removal of petrol subsidy, saying Nigeria had increased petrol prices about 3,050 times in 50 years without resolving the underlying subsidy problem.
He argued that the former arrangement placed an unsustainable burden on public finances, limiting the government’s capacity to invest in infrastructure and essential services.
According to him, subsidy removal was necessary to address the structural problem, adding that government had introduced interventions to cushion the effects of economic reforms on vulnerable Nigerians.
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.
Oyedele added that more than 800,000 micro, small and medium-sized enterprises had benefited from subsidised loans at single-digit interest rates.
He further stated that low-income earners making up to ₦100,000 monthly were exempt from personal income tax, while businesses with annual turnover of up to ₦100 million were exempt from corporate income tax, value-added tax and withholding tax under the relevant tax reforms.
The Minister also said the Nigerian capital market had grown from about ₦30 trillion to more than ₦160 trillion, expressing optimism about the naira’s outlook on the strength of improved foreign reserves and other economic fundamentals.
The federal government has also announced preparations for 2027 budget, with arrangements underway to ensure that the proposed fiscal framework is presented before the end of 2026.
Minister of State for Budget, Dr Doris Uzoka-Anite, who made the disclosure while briefing newsmen after tge FEC meeting declared “we are working on the 2027 budget, and our intention is to present it before the end of the year.”
According to her, the planned presentation is expected to set the stage for consideration of the proposed budget by the National Assembly ahead of the 2027 fiscal year.
Presenting the proposal before the end of 2026 would give lawmakers an opportunity to thoroughly vet the estimates and deliberate on the government’s proposed expenditure and revenue plans.
Further details of the 2027 budget, including its overall size, revenue projections, deficit estimates and allocations to key sectors, are expected to emerge as preparations progress.