Senator questions Tinubu’s new loan plan and past borrowings

Anambra Central senator, Victor Umeh, has raised concerns about how the federal government has managed previous loans. He asked why contractors working on capital projects have not been paid, even though the government has received approvals to borrow money for these projects.

Mr Umeh spoke on Channels Television’s Politics Today on Tuesday. This was in response to President Bola Tinubu’s request to borrow $20.52 billion and €1.045 billion.

He pointed out that the government has often said it needs to borrow money to fund its budgets. Yet, it has not met some of its financial responsibilities.

“The truth is that we have approved so much funds to be borrowed in the past. Each time, we’ve been told that this borrowing would fund the budgets, and these budgets have remained unfunded up till this day,” he said.

Mr Umeh, who represents Anambra Central Senatorial District, noted that three budgets are currently running. Contractors who are supposed to handle capital projects have still not received their payments.

“So if you borrow to finance a budget and you are not able to finance that budget, where has the money gone to? That is the question on the lips of everybody,” he said.

He believes the latest borrowing request will likely be approved because ruling party members will outnumber opposition lawmakers.

After reading the president’s letter on Tuesday, Senate President Godswill Akpabio sent the request to the Senate Committees on Local and Foreign Debts and Appropriations for further examination. He asked the committees to report back within one week.

The senate will make a decision on the borrowing request based on the committees' recommendations. So far, no loan request from the Tinubu administration has been turned down by the senate. All previous loan requests have passed with little review.

Mr Tinubu’s request for new borrowings was in a letter read by Senate President Godswill Akpabio during the plenary session on Tuesday.

The letter asked for approval to process external loans worth $20,517,755,901 and €1,045,083,643 under the 2026, 2027 Supplementary External Borrowing Plan.

The president explained that the money would be used for projects in infrastructure, agriculture, healthcare, education, water supply, security, employment generation, and financial management reforms.

According to the president, the projects were chosen after careful evaluations and are expected to help Nigeria’s socio-economic development.

He stated that borrowing is necessary to fix Nigeria’s infrastructure problems and close the funding gap.

Mr Akpabio referred the request to the Senate committees on Local and Foreign Debts and Appropriations for their consideration, instructing them to report back within one week.

This latest request follows other borrowing approvals given by the National Assembly during Tinubu's administration.

In May, lawmakers approved a $516.3 million loan from Deutsche Bank AG to build the Sokoto, Badagry Superhighway. This loan has a nine-year tenure with a grace period of up to three years. Its interest rate is set at the Secured Overnight Financing Rate plus 5.3 percent annually. The loan is backed by insurance from the Islamic Corporation of Investment and Export Credit, the insurance branch of the Islamic Development Bank.

In March, the National Assembly approved a $6 billion external borrowing plan. This included a $5 billion loan from First Abu Dhabi Bank to support the national budget and a $1 billion export finance facility arranged by Citibank for the rehabilitation of Tin Can Island Port and the Lagos Port Complex.

The latest borrowing request comes at a time when there are worries about Nigeria’s growing public debt and the cost of servicing government obligations. The government insists that borrowing is needed to finance infrastructure and development projects. But Mr Umeh has questioned if past loans have actually funded approved budgets and paid contractors.