The Federal Government has defended its proposed $21.7bn external borrowing plan, saying the funds are intended to finance productive assets rather than consumption.

The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, made this known shortly after Wednesday’s Federal Executive Council (FEC) meeting at the Presidential Villa in Abuja.

Addressing public commentary on the draft external borrowing plan submitted to the National Assembly by President Bola Tinubu, Oyedele clarified that the proposal represented a multi-year investment programme spanning approximately five years, rather than an immediate drawdown of the entire amount.

He said $10.6bn was earmarked for critical transport infrastructure, including the Sokoto–Badagry Highway, Lagos–Calabar Coastal Highway, and Kano–Kaduna Metro Rail.

Oyedele added that more than $7.9bn would be sourced from multilateral and bilateral development partners, led by a $5bn contribution from the World Bank, at an average interest rate of approximately 2.1 per cent.

Of the overall package, $3.3bn was earmarked directly for state government projects, while an additional $1.45bn was set aside for the Federal Capital Territory (FCT).

“Borrowing to consume is harmful, but borrowing ₦1 to build transformative assets worth more than ₦1 creates net positive wealth for the country,” Oyedele argued, comparing the government’s approach with strategic corporate financing.

Reiterating that macroeconomic recovery must translate into relief for households and businesses, the minister highlighted several social intervention milestones.

These included the disbursement of ₦372.6bn through the Nigerian Education Loan Fund (NELFUND) to more than 1.5 million students; the distribution of over ₦600bn to 10 million households, with plans to expand coverage to 15 million vulnerable families; and the provision of single-digit-interest loans to more than 800,000 micro, small, and medium-sized enterprises (MSMEs) through the Bank of Industry (BOI).

Oyedele also said the Federal Executive Council had fully adopted the 90-day execution framework established by the National Economic Council (NEC), pledging strict fiscal discipline.

Meanwhile, the FEC approved 10 memoranda submitted by the finance minister.

Highlighting four major approvals among them, Oyedele said the council approved a €155.9m credit facility arranged by Deutsche Bank to construct five new 132/33kV substations under Phase 1 of the Presidential Power Initiative (PPI). The project is intended to stabilise electricity supply to the national grid and reduce energy costs.

The council also approved a $970m syndicated 10-year facility led by Standard Chartered Bank and the Africa Finance Corporation (AFC) to finance rolling stock for the Kano–Maradi rail line, with the aim of boosting regional trade and reducing freight costs.

Oyedele said the FEC further approved a €76.8m credit facility from the ECOWAS Bank for Investment and Development (EBID) for Bauchi State. The funding is intended to support urban and rural road networks, as well as farm-to-market transport corridors.

On border security and trade facilitation, Oyedele said the council approved direct investment in non-intrusive cargo inspection scanners for the Nigeria Customs Service. The equipment is expected to speed up port clearance, combat smuggling, and prevent illicit arms trafficking.