KEY POINTS
- President Tinubu has asked the Senate to approve a $516 million external loan from Deutsche Bank to fund parts of the Sokoto-Badagry Super Highway.
- Former Vice President Atiku Abubakar warned against rising debt levels and weak transparency in borrowing decisions.
- Economists were split, with Akpan Ekpo flagging fiscal risks and Ayo Teriba backing the loan for its long-term capital value.
President Bola Tinubu has asked the Senate to approve another $516 million external loan. Former Vice President Atiku Abubakar is sounding the alarm, warning Thursday that Nigeria is already buckling under unsustainable debt and that fresh borrowing without transparency is reckless.
The loan, coming from Deutsche Bank, would fund Sections 1, 1A and 1B of the 1,000-kilometer Sokoto-Badagry Super Highway. The road will link Sokoto, Kebbi, Niger, Kwara, Oyo, Ogun and Lagos states, stretching from Illela to Badagry.
Godswill Akpabio, the Senate president, read Tinubu’s letter during plenary on Thursday, formally triggering legislative consideration.
Atiku pushes back hard
Atiku, speaking through his senior special assistant on public communication, Phrank Shaibu, acknowledged the importance of the project. However, he warned against rising debt levels and weak transparency in borrowing decisions.
“The resort to yet another foreign loan, without transparent terms, clear cost-benefit analysis and a credible repayment framework, raises profound questions about prudence and accountability,” Atiku said.
“What Nigerians expect is not just ambitious projects, but responsible financing. Development must not become a euphemism for deepening debt traps that generations yet unborn will have to repay,” he added.
Furthermore, he urged the National Assembly to scrutinize the loan rigorously before any approval. Atiku called the current path a postponement of crisis rather than genuine progress.
Economists split on the request
Akpan Ekpo, professor of economics and public policy at the University of Uyo, shares Atiku’s unease. He said the economy is growing too exposed to external debt and that oil revenue windfalls should go directly into infrastructure instead of new borrowing.
“GDP does not pay debt, revenue pays debt, and our revenue profile is shaky,” Ekpo said. “Most of our revenue comes from oil, which we do not control in terms of price or output. I worry that borrowing is getting too much.”
Moreover, Ekpo urged the government to explore public-private partnerships, concessions and Sukuk financing. He argued that Nigeria must retain more financing within the domestic economy to create jobs and strengthen local capacity.
However, Ayo Teriba, chief executive officer of Economic Associates, backed the loan. He said capital projects that generate long-term value are exactly the kind that justify borrowing, especially at a 5.3 percent interest rate versus the 9 percent Nigeria has been paying elsewhere.
“The superhighway will open up income opportunities, and repayment will come from the income it creates. I do not see any good president who will not take this kind of opportunity,” Teriba said.
Still, Teriba questioned why local banks remain absent from such deals. He flagged the 28 trillion naira sitting idle in Cash Reserve Ratio deposits and called for reforms to let Nigerian banks participate. Meanwhile, Tinubu maintains the loan will trim travel times between Sokoto and Lagos, improve connectivity and boost economic integration along the corridor. The Senate has referred the request to the Committee on Local and Foreign Debts for further scrutiny.
