Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has justified the Nigerian Government’s proposed $21.7 billion external borrowing programme, maintaining that the financing initiative is intended to support productive investments, accelerate economic expansion and improve the living conditions of Nigerians.
Oyedele also revealed that the government was working towards reducing inflation to a single-digit rate by the end of 2027, or sooner, expressing confidence that the administration’s economic reforms were beginning to yield tangible outcomes.
The Minister made the remarks on Wednesday while briefing State House correspondents following the Federal Executive Council (FEC) meeting chaired by President Bola Tinubu at the Presidential Villa, Abuja.
Speaking on the proposed external borrowing request submitted to the National Assembly, Oyedele emphasised that the economic justification for the financing arrangement should be determined by the productive assets it would generate, the infrastructure it would deliver and its anticipated contribution to sustainable economic growth.
“This is investment, not borrowing,” he said, explaining that the proposed financing was intended to fund projects that would create productive assets and generate long-term economic value.
The proposed external financing package, valued at approximately $21.7 billion in dollar and euro equivalents, is intended to fund priority development programmes across transportation, security, healthcare, agriculture, energy, digital infrastructure, education and social welfare.
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Oyedele disclosed that about $10.6 billion of the proposed borrowing would be directed towards transportation infrastructure, particularly strategic highway and railway projects, including the Sokoto–Badagry and Lagos–Calabar coastal highways, as well as the Kano–Kaduna railway corridor.
He explained that the government was exploring financing arrangements with multilateral institutions, bilateral development partners and other funding sources to support infrastructure expansion and critical national development initiatives.
According to the Minister, approximately $7.9 billion of the financing package would be sourced from multilateral and bilateral development institutions, with the World Bank accounting for a substantial portion of the proposed funding.
He stated that the $5 billion World Bank financing component would attract an average interest rate of approximately 2.1 per cent, while certain facilities designated for social development programmes would carry rates of about two per cent.
Oyedele maintained that the administration was prioritising concessional financing arrangements to minimise borrowing costs and secure more sustainable repayment conditions than those associated with conventional commercial loans.
He emphasised that the proposed borrowing should be evaluated against the economic value of the projects to be delivered, particularly their potential to expand productive capacity, generate employment and strengthen long-term national development.
Speaking on economic outlook, the Minister reaffirmed the government’s determination to achieve single-digit inflation by the end of 2027, citing recent improvements in price stability and other macroeconomic indicators.
He disclosed that headline inflation had moderated to 14.63 per cent in September, compared with 20.98 per cent during the corresponding period of the previous year, following an earlier peak of approximately 34 per cent.
According to him, the Federal Executive Council had agreed to strengthen ongoing interventions aimed at containing inflationary pressures, particularly rising food costs, while maintaining investments in infrastructure, human capital development and employment generation.
Oyedele said the administration would sustain prudent fiscal management and implement policies designed to consolidate macroeconomic stability, stimulate productive activities and broaden economic opportunities for Nigerians.
On the country’s external financial position, the Minister reported that foreign exchange reserves had exceeded $55 billion, representing their highest level in 18 years, while net reserves had increased to more than $45 billion from below $1 billion three years earlier.
He further disclosed that economic growth reached 4.43 per cent in the second quarter, compared with 2.74 per cent in May 2023, noting that the country’s economic performance had also improved when measured in dollar terms.
The Minister attributed improvements in government revenue to ongoing fiscal and tax reforms, revealing 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.
He added that the proportion of government revenue committed to debt servicing had declined significantly, from 97 per cent to below 60 per cent, providing greater fiscal flexibility for development expenditure.
Addressing the removal of petrol subsidy, Oyedele argued that repeated adjustments to petroleum product prices over several decades had failed to resolve the structural deficiencies associated with the previous subsidy arrangement.
He stated that petrol prices had been increased by an estimated 3,050 times over the past 50 years without producing a lasting solution to the financial and operational challenges surrounding the subsidy regime.
According to him, the former arrangement placed considerable pressure on public finances, restricting the government’s ability to channel resources towards infrastructure development and essential social services.
The Minister maintained that subsidy removal was necessary to address the underlying fiscal imbalance, while acknowledging the importance of sustained interventions to mitigate the economic consequences for vulnerable households.
On social protection, Oyedele disclosed that the administration had expanded targeted assistance programmes to cushion the effects of economic adjustments on low-income earners, households and small-scale enterprises.
He revealed that more than 10 million households had received cash transfers exceeding ₦600 billion, while the Nigerian Education Loan Fund had disbursed ₦372.6 billion to over 1.5 million students to support access to tertiary education.
The Minister also announced that more than 800,000 micro, small and medium-sized enterprises had benefited from subsidised credit facilities carrying single-digit interest rates, as part of efforts to improve access to affordable business financing.
On tax relief measures, Oyedele explained that individuals earning up to ₦100,000 monthly were exempt from personal income tax, while qualifying small businesses with annual turnover not exceeding ₦100 million would benefit from exemptions covering corporate income tax, value-added tax and withholding tax under the applicable reforms.
He assured that the government would continue assessing the effects of its economic policies and introduce necessary adjustments to support recovery, strengthen household purchasing power and protect economically disadvantaged Nigerians.
The Minister also highlighted developments in the Nigerian capital market, disclosing that its valuation had expanded from approximately ₦30 trillion to more than ₦160 trillion, which he cited as an indication of improved investor participation and market performance.
Oyedele expressed confidence in the medium-term prospects of the naira, pointing to stronger foreign exchange reserves and improvements in key economic fundamentals as factors supporting currency stability.
He reaffirmed the administration’s commitment to consolidating economic reforms, strengthening fiscal resilience and ensuring that investments in infrastructure, productive sectors and social development deliver measurable improvements in the welfare of Nigerians.
