The $21.5 billion fresh borrowing proposed by the federal government has generated heated debate on social media as netizens continue to question what the authorities intend to use the funds for.
Though the ministry of finance has clarified that the loans will not add to the country’s debt burden as it plans to tap its development partners, many Nigerians are yet to be convinced.
Nigerian President Bola Tinubu on Tuesday asked parliament to approve more than $21.5 billion in foreign borrowing for its 2025-26 borrowing plan to plug financial shortfalls to boost growth.
“These projects cut across critical sectors of the economy, including power grids and transmission lines, irrigation for improving food security, fibre optics network across the country, fighter jets for security, and rail and road infrastructure,” the ministry of finance said in a statement.
Read also: Tinubu’s fresh $21.5bn loans may not increase Nigeria’s debt profile, FG clarifies
Here are what the proposed loans will be used for:
Power grids and transmission lines
Nigeria currently suffers frequent grid collapses and “line cuts” that have continued to cripple the country’s economy and render businesses less profitable.
With the loan, the government is expected to put an end to grid collapses that occurred about 12 times in 2024, delivering increased power from midstream transmission directly to homes, businesses, and industries, helping to strengthen the country’s economic foundation.
Irrigation for improving food security
The authorities are also planning to improve food security, boost agricultural output and drastically reduce hunger through improved irrigation systems.
Part of the loans is expected to cater to these needs as more than 31.8 million Nigerians suffer from acute food insecurity.
Fibre optics network across the country
The government is also planning to expand fibre networks in a key move to boost internet access across the country.
Read also: Tinubu’s new loans push debt to N183trn
The authorities revealed recently that it plans to roll out $2 billion fibre optic infrastructure nationwide, spanning 90,000 kilometers starting at the fourth quarter of this year.
Fighter jets for security
Insecurity is weakening Nigeria’s economic boom as it stalls investments and limits agricultural cultivation. But the government is planning to borrow funds to get fighter jets in a bid to quell insurgency.
Rail and road infrastructure
Nigeria is betting big on rail and road infrastructure as a catalyst for economic growth. The ongoing Lagos-Calabar 700km road which is expected to have a rail network shows the government’s commitment to improving key infrastructure.
The proposed borrowing, planned for the second half of this year, will be beneficial for both federal and several state governments across numerous geopolitical zones including Abia, Bauchi, Borno, Gombe, Kaduna, Lagos, Niger, Oyo, Sokoto, and Yobe States.
