Financial Expert Faults Tinubu’s $20.52 Billion Loan Request, Urges Shift to Sukuk Financing

A financial expert, Asiwaju Busari Shaamsuddeen Akande, has criticised President Bola Tinubu’s proposed $20.52 billion external borrowing plan and urged the Federal Government to explore sovereign Sukuk and other non-interest financing instruments to fund infrastructure without worsening Nigeria’s debt burden.

Akande, who spoke in Calabar while assessing the borrowing request, argued that the government’s ability to repay loans should be measured against actual revenue rather than gross domestic product, warning that rising debt-servicing costs could squeeze spending on public services and development.

He called for project-specific accounting and monitoring to ensure every loan is deployed for its intended purpose, and recommended that projects such as port modernisation and power transmission be assessed for their capacity to generate revenue, save foreign exchange or stimulate industrial production before being financed with borrowed funds.

“The government should combine alternative financing with strict controls over the use of borrowed funds,” Akande said, proposing asset-backed Sukuk arrangements, including leasing and construction-financing models, to attract institutional investors to infrastructure development.

He said the approach could link financing to tangible assets and project-related income while improving transparency and reducing the risk of funds being diverted to recurrent expenditure.

Akande, however, noted that borrowing was not inherently bad, provided the economic benefits of the projects justified the financing costs.

He urged the Tinubu administration to disclose what the proposed loans would finance, identify the expected beneficiaries and establish how the projects would deliver measurable economic returns.

President Tinubu has requested National Assembly approval for external borrowing facilities of $20.52 billion and €1.045 billion under the 2026–2027 Supplementary External Borrowing Plan.

The proposed facilities cover projects in infrastructure, agriculture, healthcare, education, water supply, security and employment generation, and the request is undergoing legislative consideration.

The loan request has drawn criticism from other quarters. Senator Victor Umeh questioned why contractors are still awaiting payment despite repeated borrowing approvals, asking: “If you borrow to finance a budget and you are not able to finance that budget, where has the money gone to?”.

NLC President Joe Ajaero also challenged the justification for continued borrowing, citing increased oil revenue and the removal of petrol subsidy.

Akande’s recommendation comes amid concerns over Nigeria’s debt profile. The 2026 budget deficit stands at N20.12 trillion, with N17.89 trillion to be funded through borrowing, while debt service is projected at N15.52 trillion.