Juliet Ezeh
A fresh $516 million external loan request by President Bola Tinubu to fund sections of the ambitious Sokoto–Badagry Super Highway has sparked a nationwide debate over Nigeria’s rising debt profile, with former Vice President Atiku Abubakar and top economists warning against what they describe as risky and insufficiently transparent borrowing.
The loan request, formally transmitted to the Senate and read during plenary by Senate President Godswill Akpabio, seeks approval for $516,333,070 to be sourced from Deutsche Bank. According to the President, the funds will be used to finance Sections 1, 1A, and 1B of the 1,000-kilometre highway project, stretching from Illela in Sokoto State to Badagry in Lagos, and traversing Kebbi, Niger, Kwara, Oyo, and Ogun states.
The Tinubu administration has described the Sokoto–Badagry Super Highway as a flagship infrastructure project designed to enhance national connectivity, reduce travel time, and unlock economic opportunities across multiple regions. However, the financing approach has drawn scrutiny amid concerns about Nigeria’s mounting debt obligations and fragile revenue base.
Atiku Abubakar, in a statement issued by his spokesperson, expressed support for infrastructure development but cautioned that the country must not pursue growth at the expense of fiscal responsibility. He warned that continued borrowing without clear terms, cost-benefit analysis, and a sustainable repayment framework could deepen Nigeria’s economic vulnerability.
“At a time when Nigeria is already burdened by unsustainable debt, resorting to another foreign loan without transparency raises serious questions about accountability,” he said. “Nigerians expect not just ambitious projects, but responsible financing that does not mortgage the future of generations yet unborn.”
He further urged the National Assembly to exercise its oversight responsibility diligently, stressing that approving such loans without thorough scrutiny could set a dangerous precedent. According to him, development that is driven by opaque borrowing is neither sustainable nor beneficial in the long term.
Economic analysts have also weighed in, offering mixed perspectives on the proposed loan.
Professor Akpan Ekpo, an economist and public policy expert, raised concerns about Nigeria’s increasing exposure to external debt. He noted that while infrastructure development is necessary, the country’s weak revenue profile makes heavy borrowing particularly risky.
“The key issue is not GDP growth but revenue generation, because revenue is what services debt,” Ekpo explained. “Nigeria’s revenue is largely dependent on oil, which is volatile and beyond our control. Borrowing under such conditions, without clear repayment strategies, is worrisome.”
He questioned whether adequate feasibility studies had been conducted, particularly regarding whether toll revenues from the highway would be sufficient to repay the loan within a reasonable timeframe. Ekpo also advocated for alternative funding models, including Public-Private Partnerships, concessions, and Sukuk financing, which he said could reduce the burden on public debt while stimulating local economic participation.
On the other hand, Dr Ayo Teriba, Chief Executive Officer of Economic Associates, defended the loan, arguing that borrowing for capital-intensive infrastructure projects is both necessary and economically sound.
“This is a long-term asset that will generate economic returns well beyond the lifespan of the loan,” Teriba said. “At an interest rate of 5.3 per cent, this facility is relatively affordable compared to previous borrowing costs. It is the kind of opportunity any forward-looking government should consider.”
Teriba added that well-executed infrastructure projects have the potential to stimulate trade, create jobs, and boost government revenues over time, thereby supporting loan repayment without imposing excessive burdens on future generations.
However, he criticised the apparent exclusion of Nigerian banks from the financing arrangement. He pointed out that significant liquidity remains locked within the domestic banking system, particularly in Cash Reserve Ratio deposits, and argued that policy reforms could unlock these funds for infrastructure financing.
“We have trillions of naira sitting idle in the banking system earning zero interest. If properly structured, local banks can participate in financing projects like this, earning returns while contributing to national development,” he said.
The debate highlights a broader dilemma facing Nigeria: balancing the urgent need for infrastructure development with the imperative of maintaining fiscal discipline. While large-scale projects like the Sokoto–Badagry Super Highway promise long-term economic benefits, concerns persist about the sustainability of funding them through external borrowing.
The Senate has since referred the loan request to its Committee on Local and Foreign Debts for further legislative scrutiny. The committee is expected to review the terms, assess the economic viability of the project, and determine whether the borrowing aligns with Nigeria’s broader fiscal strategy.
As deliberations continue, the outcome of this request may shape not only the future of the highway project but also Nigeria’s approach to financing critical infrastructure in an era of tightening economic constraints.