Reps approve Tinubu’s $516m loan request for road project

President Tinubu's loan request was conveyed in a letter read by Speaker Abbas Tajudeen during Tuesday’s plenary.

The House of Representatives has approved President Bola Tinubu’s request to secure a $516.3 million external loan for the construction of sections of the Sokoto–Badagry superhighway.

The approval followed the presentation of a report by the House Committee on Aids, Loans and Debt Management during plenary on Tuesday.

The proposed 1,000-kilometre highway is designed to link Sokoto, Kebbi, Niger, Kwara, Oyo, Ogun and Lagos states, running from Illela in Sokoto State to Badagry in Lagos.

The project is expected to improve connectivity between the North-west and South-west, while opening up a major economic corridor across the country.

The president’s request, conveyed in a letter read by Speaker Abbas Tajudeen during Tuesday’s plenary, comes days after a similar communication was transmitted to the Senate for approval.

Mr Tinubu noted that the facility is already included in the federal government’s borrowing plan earlier approved by the National Assembly.

Presenting the report, the committee’s deputy chairman, Abdullahi El-Rasheed (APC, Gombe), urged lawmakers to approve the financing for a 120-kilometre stretch of the road.

Lawmakers subsequently dissolved into the Committee of Supply, where the recommendations were considered and adopted clause-by-clause before final approval in plenary.

The House endorsed all five recommendations, including the loan request and its inclusion in the federal government’s rolling borrowing plan.

The financing arrangement features a partial guarantee from the Islamic Corporation for the Insurance of Investment and Export Credit, with a nine-year tenor, up to three years’ moratorium, and an interest rate benchmarked at CME SOFR plus 5.35 per cent per annum.

To strengthen accountability, lawmakers directed strict oversight of the facility. They mandated quarterly reports from the Federal Ministry of Finance, the Debt Management Office and the Federal Ministry of Works on disbursement and project execution. All financing agreements are also to be submitted to the National Assembly within 30 days of financial close.

The House further approved measures to ensure transparency, including competitive procurement processes, independent audits, and periodic evaluation of project milestones.

The latest approval comes barely a month after the National Assembly cleared a separate $6 billion external borrowing plan by the administration. Of that sum, $5 billion is expected from the First Abu Dhabi Bank to support the national budget, while a $1 billion export finance facility from the United Kingdom, arranged by Citibank, is earmarked for the rehabilitation of Tin Can Island Port and the Lagos Port Complex.

Rising debt concerns

The new borrowing request comes amid growing concerns over Nigeria’s debt profile. Data from the Debt Management Office show that the country’s total public debt exceeded N87 trillion (about $113 billion) as of mid-2023, following the securitisation of Ways and Means advances from the Central Bank of Nigeria.

The figure has continued to increase with fresh borrowings and exchange rate pressures.

In recent years, the federal government has relied more on external loans to finance budget deficits, fund infrastructure and refinance existing obligations.

Officials, however, maintain that concessional and relatively lower-cost foreign loans remain necessary to support critical infrastructure and ease domestic borrowing pressures.