Tinubu’s Debt-Funded Infrastructure Drive Defended Amid Rising Criticism
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Tinubu’s Debt-Funded Infrastructure Drive Defended Amid Rising Criticism
By Alabidun Shuaib AbdulRahman
The Independent Media and Policy Initiative, IMPI, has defended the Federal Government’s growing reliance on debt to finance infrastructure projects, arguing that Nigeria’s enormous infrastructure deficit leaves the country with few viable alternatives if it hopes to achieve sustainable economic growth.
In a policy statement issued and obtained by INCNews247, the Chairman of IMPI, Dr Omoniyi Akinsiju, dismissed criticisms from opposition figures and advocacy groups who have faulted the President Bola Tinubu administration’s borrowing strategy.
According to him, critics have failed to present practical solutions to Nigeria’s long-standing infrastructure challenges, which continue to hamper economic productivity and development.
Akinsiju noted that Nigeria faces a severe infrastructure shortfall across key sectors, including roads, rail transportation and electricity.
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He said more than 70 per cent of the country’s estimated 195,000-kilometre road network remains in poor condition, while rail infrastructure is inadequate for a population exceeding 220 million.
He also highlighted persistent power shortages, noting that businesses spend about $29bn annually on alternative energy sources due to unreliable electricity supply.
The policy group cited estimates by international institutions, including the World Bank, African Development Bank and International Finance Corporation, which place Nigeria’s infrastructure deficit at between $2tn and $3tn.
However, it argued that a more realistic target was a projection by global consultancy firm KPMG, which estimated that annual infrastructure spending of $14.2bn over a decade could significantly narrow the gap.
According to the group, no Nigerian administration since 2000 has consistently met that spending threshold despite periods of high oil revenues.
It added that many capital budgets over the years suffered from poor implementation, limiting their impact on infrastructure development.
The group, however, praised the Tinubu administration for what it described as a record-breaking fiscal commitment to infrastructure.
IMPI pointed to the 2026 Appropriation Act, which earmarked about $23bn for infrastructure and capital expenditure, representing nearly half of the national budget.
The group noted that the allocation exceeded KPMG’s recommended annual benchmark and marked the first time Nigeria had committed such a significant volume of resources to infrastructure development.
Defending the decision to finance a large portion of the expenditure through borrowing, Akinsiju argued that savings from the removal of fuel subsidies would be insufficient to address the country’s infrastructure needs.
He maintained that the subsidy regime itself had largely been sustained through debt and could not have generated enough resources to fund critical projects.
The group also rejected suggestions that Public-Private Partnerships should replace government borrowing as the primary funding mechanism for infrastructure.
It said PPP arrangements in Nigeria have historically faced challenges such as weak legal frameworks, high transaction costs, political uncertainties and limited institutional capacity, factors that have discouraged private investment in large-scale infrastructure projects.
According to the statement, investor confidence in Nigeria’s debt instruments is improving, as reflected in declining Eurobond yields and stronger demand for the country’s sovereign debt.
The group argued that continued government investment in infrastructure would further enhance investor confidence, attract private capital and stimulate long-term economic growth.
IMPI further contended that domestic borrowing by the Federal Government would strengthen local financial markets by creating benchmark interest rates for private-sector debt issuance.
It stressed that concerns about crowding out private borrowers should be weighed against the urgent need to close Nigeria’s infrastructure gap.
The organisation said recent approvals by the Federal Executive Council demonstrated the administration’s commitment to infrastructure renewal.
It cited multi-billion-dollar rail projects in Lagos, Kano and Kaduna, over ₦7tn worth of road and bridge projects nationwide, extensive reconstruction plans for major seaports and more than ₦1tn allocated to power-sector projects.
The group concluded that debt-financed infrastructure investment remains essential to Nigeria’s development aspirations, insisting that strategic borrowing for transportation, energy, healthcare, education and digital infrastructure would deliver long-term economic benefits and improve living standards across the country.
