Tinubu defends borrowing as infrastructure drive targets $1trn

President Bola Tinubu has defended the Federal Government’s growing reliance on borrowing, arguing that loans used to finance productive infrastructure can expand economic output, create jobs and lower business costs, as his administration pursues its target of building a $1 trillion economy by 2030.

In an essay titled “From Reforms to Delivery: Our Infrastructure Investment and Growth Strategy”, the President said the debate over public borrowing should focus less on the amount raised and more on the economic value of the projects financed, their capacity to generate returns and the benefits they deliver to Nigerians.

“The real question is not how much we borrow, but what we build, what value we create and what future we leave behind,” Tinubu wrote, responding to criticism, particularly from opposition leaders, over the government’s loans from international institutions and banks.

He identified the Lagos-Calabar Coastal Highway, Sokoto-Badagry Superhighway, Trans-Sahara Superhighway, electricity grid upgrades and modernisation of major commercial ports in Lagos as key investments intended to improve connectivity, reduce logistics costs and unlock agricultural and industrial activity.

The President said the Lagos-Calabar Coastal Highway was projected to reduce logistics costs along its corridor by 15 to 20 per cent and potentially add up to two per cent to gross domestic product through increased trade, tourism and industrial activity.

The project is also expected to generate about 100,000 direct jobs in construction and engineering, alongside more than 150,000 indirect jobs across logistics, building materials and related services, according to the President.

“We are not simply building highways. We are opening economic corridors, connecting markets, unlocking industries and reshaping Nigeria’s economic geography,” he said.

The economic argument underpinning the borrowing strategy is that infrastructure investment can reduce the cost of moving goods, improve access to markets, support private investment and raise productivity. However, the benefits will depend on projects being completed on schedule and delivering the projected economic returns.

Tinubu said Nigeria could not achieve a $1 trillion economy with infrastructure designed for a much smaller economy, stressing that sustained investment was necessary to expand production, industrialise and strengthen trade.

He linked the infrastructure push to improvements in macroeconomic indicators, citing real GDP growth of 4.43 per cent in the second quarter of 2026, downward pressure on inflation and stronger foreign exchange reserves.

According to the President, headline inflation fell to 14.63 per cent in September from 20.98 per cent a year earlier, while gross external reserves rose to $55.1 billion as of October 9, including about $46 billion in net reserves.

He also said Nigeria’s tax-to-GDP ratio had increased to 12.5 per cent from seven per cent, pointing to improvements in revenue mobilisation and public finances.

Tinubu attributed the developments to reforms introduced since May 2023, including petrol subsidy removal, foreign exchange market reforms, tax changes and tighter monetary conditions. He said the decisions had been difficult but necessary to restore macroeconomic stability and improve investor confidence.

“Confidence has a price; our cost of borrowing is going down, and the country risk premium has drastically decreased,” he said, citing assessments by international credit rating agencies and investors as evidence of improved financial credibility.

The President said the government was seeking longer-term financing arrangements that better match the lifespan of infrastructure assets, with the aim of reducing refinancing pressures and securing more competitive funding for productive investment.

He also outlined five priorities for the next phase of the administration’s economic strategy: food affordability and energy price stability; budget harmonisation and fiscal discipline; completion of high-impact infrastructure; improved economic policy and regulatory efficiency; and targeted household support alongside investment in human development.

The emphasis on project completion is particularly important because borrowing alone does not create economic value. The return on public debt ultimately depends on whether infrastructure becomes operational, improves productivity, attracts private capital and generates enough additional economic activity to justify its financing cost.

Tinubu said the administration’s performance should be assessed through completed projects, increased investment, job creation and improved living standards.

“Securing financing is not the achievement. Completing the project, delivering value and improving the lives of Nigerians is the achievement,” he said.

For an economy seeking to expand production and reduce structural business costs, the central test of the borrowing strategy will be whether the infrastructure being financed delivers measurable improvements in trade, electricity supply, employment and household welfare.