Nigeria Approves $516 Million Loan for Sokoto-Badagry Superhighway Amid Rising Debt Concerns
The Nigerian House of Representatives has greenlit President Bola Tinubu’s request for a $516.3 million external loan to fund the construction of a crucial segment of the Sokoto-Badagry superhighway, a major infrastructure project aimed at boosting regional connectivity and economic growth.
The approval came during Tuesday’s plenary session after lawmakers reviewed a report from the House Committee on Aids, Loans, and Debt Management. The 1,000-kilometer highway will stretch from Illela in Sokoto State to Badagry in Lagos, linking seven states—Sokoto, Kebbi, Niger, Kwara, Oyo, Ogun, and Lagos—and creating a vital trade corridor between Nigeria’s North-West and South-West regions.
Loan Details and Oversight Measures
The financing arrangement includes a partial guarantee from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC). The loan carries a nine-year repayment term, with a three-year moratorium and an interest rate pegged at the Secured Overnight Financing Rate (SOFR) plus 5.35% annually.
To ensure transparency, lawmakers mandated strict oversight measures, including:
- Quarterly reports from the Federal Ministry of Finance, Debt Management Office, and Ministry of Works on fund disbursement and project progress.
- Submission of all financing agreements to the National Assembly within 30 days of finalization.
- Competitive procurement processes, independent audits, and periodic milestone evaluations to prevent mismanagement.
Economic Impact and Debt Concerns
The project is expected to enhance trade, reduce transportation costs, and stimulate economic activity across multiple states. However, the approval comes amid growing unease over Nigeria’s escalating debt burden.
Recent data from the Debt Management Office (DMO) reveals Nigeria’s total public debt surpassed N87 trillion ($113 billion) by mid-2023, following the securitization of Central Bank loans. Critics warn that continued borrowing—especially in foreign currency—exposes the economy to exchange rate volatility and repayment risks.
Just weeks ago, the National Assembly approved a separate $6 billion loan, including $5 billion for budget support and $1 billion for port rehabilitation. While officials argue that concessional foreign loans are necessary for infrastructure development, analysts urge caution, calling for stricter debt sustainability measures.
Next Steps
With the House’s approval secured, the Senate is expected to review the request soon. If passed, construction could begin on the 120-kilometer stretch covered by this loan, marking a significant step toward completing the trans-national highway.
As Nigeria balances ambitious infrastructure goals with fiscal responsibility, the success of this project—and its impact on the nation’s debt trajectory—will be closely watched.
— Reported by Nexio News
