Reps Approve Tinubu’s $516m Loan Request for Road Project

Nigeria's House of Representatives has given the green light to President Bola Tinubu's request for a substantial $516.3 million external loan, earmarked for the ambitious Sokoto-Badagry superhighway project. This approval marks a significant step towards realizing a critical infrastructure initiative designed to bridge the economic divide between the country's north and south.

The proposed 1,000-kilometer highway is envisioned as a transformative artery, linking the northwestern states of Sokoto and Kebbi to the southwestern hubs of Oyo, Ogun, and Lagos. Beyond mere connectivity, the project promises to unlock a vital economic corridor, fostering trade, facilitating the movement of goods and people, and ultimately stimulating growth across multiple regions of Nigeria.

The financing arrangement for this mega-project is complex, featuring a partial guarantee from the Islamic Corporation for the Insurance of Investment and Export Credit. It includes a nine-year tenor, a moratorium period of up to three years, and an interest rate benchmarked at CME SOFR plus 5.35 percent per annum. To ensure accountability, lawmakers have mandated strict oversight, requiring quarterly reports from relevant ministries and the Debt Management Office on fund disbursement and project execution.

However, this approval arrives at a time of heightened concern over Nigeria's escalating debt profile. The nation's total public debt has surpassed N87 trillion, raising questions about the sustainability of further borrowing. While the Sokoto-Badagry superhighway is presented as a crucial development project, its financing adds to the growing debt burden, underscoring the delicate balance the government must strike between infrastructure development and fiscal responsibility.