Tinubu’s Fresh $6.9 Billion Loan Targets Poverty Alleviation, Says Economist

A Professor of Economics at the Lagos Business School, Bongo Adi, has described the $6.9 billion foreign loan secured by President Bola Tinubu as a strategy aimed at addressing poverty in the country.

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Naija News reports that Adi made this known on Wednesday, April 1, 2026, during an appearance on Channels Television’s programme, The Morning Brief.

The National Assembly had on Tuesday approved the President’s request for a $6.9bn external loan facility.

A key component of the approval mandates that 40 per cent of the funds be channelled into capital projects captured in the 2025/2026 budgets.

The decision followed the adoption of a report by the Senate Committee on Local and Foreign Debt, which recommended the allocation to ensure the loan directly supports infrastructure and development initiatives.

Speaking on the development, Adi linked the borrowing to efforts to stimulate sectoral development and reduce poverty levels in Nigeria.

“Let’s bring it down to the translation of that borrowing, to raise sector development on poverty alleviation. You will agree that the level of poverty we are currently confronting in Nigeria is at levels we have never seen in our history,” he said.

He, however, painted a grim picture of the current situation, noting that the country is witnessing unprecedented hardship.

“So what I can see is that this government seems to be supervising the highest level of poverty in our country’s history,” he added.

The economist explained that the government’s decision to borrow is driven by rational economic considerations.

He said, “The government is also a rational agent just like individuals, so they are looking at how to maximise their returns at the least cost.

“For the government, I think their maximisation problem is to borrow as much as they can. Given their fiscal situation, they make it seem to speak in their favour.”

Adi further noted that Nigeria’s external reserves, estimated at about $50bn, have helped boost creditor confidence.

“You have an external reserve of 50 billion, so everybody, even the creditors, has confidence that this government can repay,” he said.

According to him, the government may not be overly concerned about long-term repayment obligations since such debts are typically spread over several years.

He cited loan repayment timelines of between five and 10 years, suggesting that current officeholders may not bear the full burden.

“So you can see that everything speaks in the direction of more borrowing. You can’t stop it because, given the rationality at play here, I think the rational choice is for the government to borrow,” he stated.

Adi acknowledged that while macroeconomic and fiscal reforms may be yielding some results, their impact has yet to significantly reach ordinary Nigerians.

“Given the time lag, again with the collapse of infrastructure, it begins to appear that the time lag keeps retracting, and we begin to see the cascade to the micro level to the ordinary man or woman on the street,” he said.

He noted that widespread hardship continues to shape public perception of government policies.

“So this is the challenge that we have, currently the misery of the population is exacerbating, and that’s why people are not so happy when they hear the government is borrowing more money,” he added.

The economist also pointed to persistent infrastructure challenges, particularly in the power sector, as a major constraint on productivity.

“What can you say to that when there is no light and productivity is at an all-time low, even though at the macro front, we seem to be doing well?” he queried.

He added that improvements recorded at the macroeconomic level are largely driven by developments in the oil sector, which he said is still underperforming.

Adi further noted that many Nigerians are still grappling with the aftermath of key policy decisions, including the removal of fuel subsidy and the unification of the foreign exchange market.

According to him, these reforms, while necessary, have continued to exert pressure on households and businesses, deepening the economic strain on the population.