FG To Spend $747m On Coastal Highway As Reps Approve Fresh Loan
The Federal Government is to spend $747 million on the Lagos-Calabar Coastal Highway project as the House of Representatives yesterday approved an additional $47 million external loan to fund the project.
The new loan is part of those under the government’s 2025–2026 external borrowing plan request approved by the lawmakers yesterday.
Tinubu, in his letter to the lawmakers, said the adjustment to the borrowing plan was due to an increase in the funding requirement for the project, whose cost rose from $700 million to $747 million, a $47 million increment.
He said the projects, under the revised borrowing plan, were selected based on rigorous economic evaluations and their projected contribution to national development goals, including job creation, skill development, promotion of entrepreneurship and poverty reduction.
The approval for $47m increase is coming amidst concerns by Nigerians that the project is yet to achieve a significant progress since its flag-off in March 2024.
President Bola Ahmed Tinubu had, on June 1, 2025, inaugurated the completed part of phase one, section one of the highway, measuring 30 kilometers.
However, a blogger, Anthony Abakporo, has alleged that the section commissioned could not be up to 30 kilometres.
The 700 kilometre highway project being handled by Hitech Construction Company Ltd, is expected to be completed in eight years.
The House also approved the president’s request for a total facility for various projects and programmes under the 2025-2026 External Borrowing (Rolling) Plan comprising USD21,890,647,912 and €2,193,856,324.54 and JPY15,000,000,000 and grant of €65,000,000 respectively.
Also approved was $300 million for the Nigeria Universal Communications Access Project; a telecommunications infrastructure project targeted at bridging the digital divide through the deployment of 7,000 telecommunications towers across underserved and unserved communities in Nigeria.
The chairman of the House Committee on Aids, Loans and Debt Management, Abubakar Hassan Nalaraba, while presenting the report of its committee, at the Committee of the Whole chaired by Deputy Speaker Benjamin Okezie Kalu, said the project was inadvertently omitted in the computation of the earlier borrowing plan.
He said the omission of this critical project would cause significant harm to public interest.
Nalaraba, however, explained that the loan facility did not equate to actual new borrowing for the 2025 fiscal year as it had been captured in the Medium-Term Expenditure Framework (MTEF) covering both the federal and subnational governments.
He said the proposed borrowings would be sourced from Nigeria’s development partners that offer concessional financing involving low interest rates, moratorium and long repayment periods, thereby supporting Nigeria’s development objectives sustainably.
He said the loans were meant to support the government in strengthening financial and human resources’ management in basic education and primary healthcare sub sector.
Nalaraba said that part of the loans would also be used to fund priority projects such as railways, security, agriculture, power plants, housing and digital connectivity to boost productivity.
Among some of the projects to be funded by the loans include “Hope Health Education and Governance ($1.5 b); Construction of Fibre Optics network across Nigeria ($980m); Sustainable Power and irrigation for Nigeria project ($500m), and Rural Access and Agricultural Market project scale up ($500m) to name a few.”
He said the projects would create millions of direct and indirect jobs, lower food inflation and lead to increased export earnings, support external reserves and stabilise the naira.
Nalaraba noted that unlike loans, the grant component (€65m) does not require repayment, adding that it “provides a rare opportunity for climate resilience, and gender empowerment.”
“Despite the additional borrowings, the Federal Government’s debt portfolio remains sustainable. At over N145 trillion, debt to GDP ratio of about 50% is within international threshold (56%). The current administration has succeeded in reducing the high debt service to revenue ratio from over 90% to less than 70%.
“The FG’s capacity to service the new debt is bolstered by the anticipated revenue gains from the Nigerian Tax Act 2025 projected to grow by over 18% year-on-year starting from 2026. This revenue expansion reduces the risk of future debt distress and provides a buffer for debt servicing.
“The proposed loans are spread across multiple concessional sources with long tenors and low interest rates. As such, the additional debt will have an insignificant impact on debt servicing obligations in the short term, while ensuring catalytic investment in critical sectors that make room for improved domestic resource mobilization”, he said.
The committee said Abia, Bauchi, Borno, Gombe, Kaduna, Katsina, Lagos, Niger, Oyo, Sokoto, Yobe and Zamfara would benefit from concessional loans for various infrastructural projects including roads, clean energy, waterways as well as human capital development notably education and healthcare.
‘Borrowing must be for infrastructure’
Speaking on the development, the Chief Economic Strategist for the Economic Community of West African States (ECOWAS), Prof. Ken Ife, stated that government must borrow for infrastructure and not consumption as it has been the case for a long time.
“Borrowing itself is not bad, but our borrowing must be for infrastructure investment that has the capacity to repay itself. What we have seen over the years is borrowing without transparency and accountability and nobody to account for it.
“The Fiscal Responsibility Act, which is one of the best Acts in the world, stipulates that borrowing should be for capital expenditure such as Healthcare, infrastructure and other projects. However, borrowing for consumption or poverty alleviation is not part of it
“The Law stipulates that borrowing has to have economic value either through Private Public Partnership or other means. But today the government is borrowing without even transparency to account for where the money is going to,” he said.
According to him, if unless the borrowing is for infrastructure development, the government “will just be subjecting Nigeria to fiscal stress as the Law is clear that you can only borrow for long term from about 10 years to 20 years and the loan must also be on concessional rates which is at least 3 percent.”
Previous borrowing plans
The latest approval of Tinubu’s request came amidst Nigeria’s expanding borrowing profile under Tinubu’s administration.
The Senate had on Tuesday approved Tinubu’s plan for $21 billion in foreign borrowing to plug shortfalls in the 2025 budget.
In November 2023, the president sought legislature’s approval for a $7.8 billion and €100 million borrowing plan to fund key infrastructure and social development projects over the 2022–2024 period.
Nigeria’s total public debt climbed to N149.39 trillion in March 31, 2025, representing a year-on-year surge of N27.72 trillion or 22.8% compared to N121.67 trillion recorded in 2024.
Despite concerns raised concerns over the sustainability of the country’s borrowing spree, warning of future repayment burdens and fiscal vulnerabilities, the federal government has, however, maintained that concessional loans are essential to bridging Nigeria’s infrastructure gap and stimulating growth. (Daily trust)