The House of Representatives has approved a loan of $347 million requested by the president to help fund building the Lagos-Calabar coast highway as well as other infrastructure projects. The decision was made in an open session after a thorough review of the updated funding requirements for the project currently in progress.
The initial estimate was 700 million dollars, the final amount of cost for the Lagos-Calabar Highway has risen up to $747 million. The loan that was approved will bridge the financing gap of $47 million to the project, and 300 million of the funds will be earmarked to funding the Nigerian Universal Communications Access Project. The project is aiming to build 77,000 communication towers throughout areas that are rural or underserved to increase digital access.
After this approval, the overall plan of borrowing for 2025-2026 has been set at around $21.89 billion, which is slightly more than the previous estimate which was $21.54 billion. When presenting the request the president explained that the increase was due to fluctuations in exchange rates as well as additional commitments from credit agencies for exports.
The House Committee on Aids, Loans, and Debt Management was in favor of the request following an evaluation of Nigeria’s current debt burden. The committee said that Nigeria’s debt-to-GDP ratio is viable at approximately 50 percent, which is lower than the threshold of 56% recommended for emerging economies. The committee also observed improvements in efficiency for debt service as debt service is being responsible only 70% the government’s revenue, down from more than 90% in the previous years. A rise of 18% in the projected revenue of the government due to tax reforms, bolstered the argument for approval of loans.
With the legislative support now in place and the administration now has the backing to begin implementing these important infrastructure projects. The main focus will be improving transport infrastructure and extending connectivity to the internet across the nation. Effective oversight and efficient utilization of money will be essential in order to ensure these investments bring lasting social and economic advantages.
