Expert urges Tinubu to explore Sukuk over fresh foreign loans
A financial expert, Asiwaju Busari Shaamsuddeen Akande, has urged the Federal Government to explore sovereign Sukuk and other non-interest financing instruments as part of efforts to fund infrastructure without worsening Nigeria’s debt burden. Akande, who made the recommendation in Calabar while examining President Bola Tinubu’s proposed external borrowing plan, said the government should combine…
Financial expert Asiwaju Busari Shaamsuddeen Akande has advised Nigeria's Federal Government to consider sovereign Sukuk and other non-interest financing instruments to fund infrastructure development without exacerbating the country's debt burden. Akande, while reviewing President Bola Tinubu's proposed external borrowing plan in Calabar, suggested that the government should pair alternative financing with tight controls over the use of borrowed funds.
He argued that the government's capacity to repay loans should be evaluated based on its actual revenue rather than the country's Gross Domestic Product (GDP). Akande stressed that excessive debt servicing costs could limit spending on public services and development. He also called for project-specific accounting and monitoring to guarantee that every loan is used for its intended purpose.
Akande proposed assessing projects like port modernisation and power transmission for their potential to generate revenue, conserve foreign exchange, or boost industrial production before financing them with borrowed funds. He recommended asset-backed Sukuk, such as leasing and construction-financing arrangements, to attract institutional investors to infrastructure development.
This approach could tie financing to tangible assets and project-related income, improve transparency, and lower the risk of funds being misused for recurrent expenditure. However, Akande clarified that borrowing isn't inherently negative, provided the economic benefits of the projects justify the financing costs. He urged Tinubu's administration to disclose the specifics of the proposed loans, identify the expected beneficiaries, and demonstrate how the projects would yield economic returns.
President Tinubu has sought National Assembly approval for external borrowing facilities totaling $20.52bn and €1.045bn under the 2026-2027 Supplementary External Borrowing Plan. These funds would support infrastructure, agriculture, healthcare, education, water supply, security, and employment generation projects. The request is currently under legislative review.
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