Tinubu Defends Fresh Foreign Loans, Says Nigeria Needs Infrastructure to Reach $1tn Economy

President Bola Tinubu has defended his administration’s plan to secure additional foreign loans, arguing that long-term investments in infrastructure are necessary to achieve Nigeria’s ambition of becoming a $1 trillion economy by 2030.

The President said the proposed borrowing would fund major projects in road construction, electricity, port development, healthcare and education, creating jobs and supporting economic growth.

Tinubu Lists Projects to Receive Funding

In a statement titled From Reforms to Delivery: Our Infrastructure Investment and Growth Strategy, Tinubu said the focus should be on the value generated from borrowed funds rather than the amount borrowed.

Among the projects highlighted were the Lagos-Calabar Coastal Highway, Sokoto-Badagry Superhighway, Trans-Sahara Superhighway, electricity grid improvements and upgrades to major commercial ports in Lagos.

According to the President, the Lagos-Calabar Coastal Highway could reduce transportation costs along its route by 15 to 20 per cent and contribute up to two per cent to Nigeria’s GDP through increased trade, tourism and industrial activities.

He also projected that the project would generate about 100,000 direct jobs in construction and engineering, alongside more than 150,000 indirect jobs in logistics, building materials and related sectors.

Tinubu maintained that Nigeria needs modern infrastructure to support its $1 trillion economic target, arguing that the country cannot achieve that ambition with facilities designed for a much smaller economy.

President Highlights Economic Improvements

The President also defended the administration’s economic reforms, including the removal of petrol subsidy, exchange rate unification and tax reforms.

He cited economic growth of 4.43 per cent in the second quarter of 2026 and a decline in headline inflation to 14.63 per cent in September, compared with 20.98 per cent in the same period last year.

Tinubu further disclosed that Nigeria’s gross external reserves stood at $55.1 billion as of October 9, 2026, while the country’s tax-to-GDP ratio increased from seven per cent to 12.5 per cent.

He said these developments, alongside improved investor confidence and positive assessments by international credit rating agencies, had strengthened Nigeria’s position in accessing foreign financing.

However, the President acknowledged the need to manage public debt carefully. He disclosed that public debt stood at 35.75 per cent of GDP in the second quarter of 2026, while debt servicing accounted for about 65 per cent of revenue in the first half of the year.

NLC Questions Government’s Borrowing Plans

The Nigeria Labour Congress has challenged the Federal Government to explain the need for additional foreign loans despite claims that revenue has increased following the removal of petrol subsidy.

Speaking on Channels Television’s The Morning Brief, NLC President Joe Ajaero questioned why Nigeria continued to seek loans from international institutions when the government had reported improved earnings.

Ajaero also questioned the borrowing plan in light of rising international crude oil prices, noting that the 2026 budget was based on an oil price benchmark of $70 per barrel, while prices had reportedly risen above $100.

He argued that higher oil earnings and increased revenue allocations to states should prompt the government to explain why further borrowing was necessary.

However, Ajaero clarified that the NLC had no authority to approve or reject government loans, urging Nigerians and relevant institutions to demand accountability over the borrowing plan.

Debate Continues Over Nigeria’s Debt

The Federal Government’s proposed borrowing includes requests for approval to secure $20.5 billion and €1.45 billion in foreign loans, a move that has attracted questions over the country's debt obligations and spending priorities.

While Tinubu maintains that long-term borrowing will help finance infrastructure capable of supporting economic growth, the NLC wants the government to justify the need for more loans amid reported improvements in revenue.

The President said the success of the borrowing strategy would ultimately depend on completing projects, ensuring value for money and improving the living conditions of Nigerians.

Channels Television