Votes are Near, Debts Keep Rising

As fresh borrowing requests stir controversy ahead of the general election, Festus Akanbi examines the administration’s infrastructure defence and whether growing repayment obligations will leave Nigeria’s next government enough room to deliver development

Nigeria’s next President will inherit two competing demands: the promises that win an election and the repayment schedules that survive it. For citizens awaiting functioning hospitals, decent classrooms and reliable electricity, the concern is whether yesterday’s debts will consume tomorrow’s opportunities.

President Bola Tinubu’s latest defence of foreign borrowing sharpens that tension. His administration argues that loans will finance productive infrastructure, create jobs and support a $1 trillion economy by 2030. Critics demand evidence that rising obligations are delivering benefits commensurate with their costs.

The immediate controversy concerns the request submitted to the Senate on October 27 for approximately $20.52 billion and €1.05 billion under the 2026–2027 Supplementary External Borrowing Plan. The proposed financing covers infrastructure, agriculture, healthcare, education and other programmes. With the presidential election scheduled for January 16, 2027, its implications extend beyond the administration seeking approval.

The Administration’s Answer

In his essay, “From Reforms to Delivery: Our Infrastructure Investment and Growth Strategy,” circulated by presidential spokesman Bayo Onanuga, Tinubu argues that borrowing should be assessed against the assets and opportunities it creates.

His defence identifies the Lagos-Calabar Coastal Highway, Sokoto-Badagry Superhighway, Trans-Sahara Superhighway, electricity upgrades and port modernisation as investments intended to strengthen productive capacity. The administration also says it is pursuing longer financing tenors aligned with infrastructure lifespans.

That is a substantive response to the criticism. Nigeria’s infrastructure deficit imposes costs on manufacturers, farmers and households. Roads that shorten journeys, ports that clear goods efficiently and electricity systems that reduce generator dependence can expand production and strengthen government revenue.

However, an economically desirable project is not automatically an affordable financing proposition. Its value depends on construction costs, borrowing terms, completion time, maintenance and actual use.

Promises and Performance

The President projects that the coastal highway could reduce logistics costs along its corridor by 15–20 per cent, support trade and tourism, and generate substantial direct and indirect employment. These remain anticipated benefits rather than established outcomes.

Their eventual scale will depend on delivery and connections to farms, factories, ports and markets. A completed road may stimulate commerce; an unfinished corridor can accumulate financing costs while businesses continue bearing existing transport expenses.

The distinction also applies to the $1 trillion economy ambition. Borrowed money can help create productive assets, but securing financing does not establish that the resulting investment will generate sufficient economic or fiscal returns.

Tinubu’s response therefore places project execution at the centre of the debate. It also creates a measurable standard against which the administration’s borrowing decisions can be assessed.

The Price of Yesterday

Existing obligations explain public unease. Debt Management Office figures put Nigeria’s total public debt at N166.79 trillion in June 2026, against N159.35 trillion in March. Domestic obligations accounted for N91.59 trillion and external debt for N75.20 trillion. The total includes federal, state and Federal Capital Territory liabilities.

These figures require careful interpretation. Exchange-rate movements can change the naira value of foreign obligations without equivalent fresh borrowing. Legislative approval also differs from disbursement: facilities may be drawn gradually over several years.

The more immediate constraint is revenue. The International Monetary Fund’s June assessment estimated federal interest payments at 53.2 per cent of federal revenue in 2025 and projected 53.7 per cent for 2026. These figures cover interest, not total debt service including principal repayments.

This pressure limits resources for competing priorities. A government can continue paying creditors while delaying contractors, squeezing public services or postponing capital projects.

The Citizens’ Test

In his commentary, “Borrowing Is Not a Good Governance”, Ibrahim Muhammad Sani expresses the frustration underlying the controversy: government should demonstrate repaired schools, functioning healthcare centres, paid pensions and accountable expenditure.

His strongest challenge is straightforward. What did earlier borrowing deliver?

Tinubu’s response acknowledges the importance of tangible results. But the administration must connect financing announcements to identifiable projects, expenditure records and completed assets.

The IMF’s assessment offers a similarly qualified picture: reforms have improved macroeconomic outcomes and resilience, while conditions remain difficult for many Nigerians. Aggregate improvement and household hardship can coexist.

For families struggling with food, transport and energy costs, projected infrastructure gains will become persuasive when they translate into jobs, lower expenses and better services.

What the Senate Must Establish

The proposed shift towards longer financing tenors deserves scrutiny. Matching repayment periods to asset lifespans can reduce refinancing pressure, but longer maturity alone does not establish affordability.

Lawmakers need each facility’s interest rate, fees, currency, grace period, maturity and repayment schedule. They also need project appraisals, procurement arrangements, implementation milestones and evidence of readiness.

Foreign-currency loans introduce another exposure. Where revenues accrue mainly in naira, depreciation can increase the domestic cost of servicing dollar and euro obligations. Infrastructure may generate broad economic benefits without directly earning foreign exchange.

Scrutiny should therefore establish how repayments will be funded under less favourable revenue and exchange-rate conditions. Publishing the performance of previously financed projects would strengthen that assessment.

Whoever Wins Will Pay

A second Tinubu administration would meet these obligations alongside renewed campaign promises. An opposition government would inherit the same contracts while seeking resources for its own programme.

However, without facility-level repayment schedules, it would be misleading to suggest that all the proposed borrowing must be repaid during the next presidential term.

The administration has presented an economic case for borrowing. Its credibility rests on sustainable terms, transparent expenditure and completed projects.

Nigerians will choose their next government at the polls. The financing decisions taken now will help determine how much that government can deliver.