Oyedele lists benefits of $21.7bn loan, says $4.8b belongs to states

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Read History Go to My Account Log Out Enhanced by Google News Oyedele lists benefits of $21.7bn loan, says $4.8b belongs to states Taiwo Oyedele, Minister of Finance and Coordinating Minister for the Economy, has explained that the $21.7bn loan, recently passed to

Listen to this article Share Taiwo Oyedele, Minister of Finance and Coordinating Minister for the Economy, has explained that the $21.7bn loan, recently passed to the Senate for approval, will be deployed to tackling the nation’s economic challenges.

The Minister stated this while briefing State House Journalists after the Federal Executive Council FEC meeting presided over by President Bola Tinubu, on Wednesday.

The Minister who was reacting to public criticism of the policy, announced that States have a component of $4.8bn inside the loan, expected to be deployed to tackling infrastructure, agriculture and human capital development.

Oyedele who had earlier at the FEC meeting, presented a memo on the state of the economy to FEC, highlighted the basis for the ongoing reforms embarked upon by the President Tinubu’s administration, in four parts.

He explained that inflation was at 22.41%, at the time, while Nigeria’s foreign reserve was at its lowest ebb, net of $859 million.

He lamented that the nation’s foreign reserve was not even enough to cover one month of import.

“We had the spread between the official rates, which were many, and the current rates of over 60% premium, enabling round tripping by the high and connected, while businesses, including manufacturers, could no longer access foreign exchange,” Oyedele said.

He noted that manufacturers secured letter of credit that were disregarded by the international community because they could not be relied upon to provide their first liquidity.

“We had printed altogether over 30 trillion naira to spend, and the impact on that amount at the time this was more than $20 billion. So, part of the impact of that amount is what we are dealing with today, through inflationary pressure,” he added.

“The debt service at the time was consuming 97% of revenue, nearly 100%, and about 27 states could no longer reliably pay salaries, and they were owing areas of pension and gratuities. Without the reform, we will be dealing with hyperinflation today.”

On tax relief measures, Oyedele explained that individuals earning up to ₦100,000 monthly were exempt from personal income tax, while qualifying small businesses with annual turnover not exceeding ₦100 million would benefit from exemptions covering corporate income tax, value-added tax and withholding tax under the applicable reforms.

He assured that the government would continue assessing the effects of its economic policies and introduce necessary adjustments to support recovery, strengthen household purchasing power and protect economically disadvantaged Nigerians.

Oyedele, while highlighting developments in the Nigerian capital market, disclosed that its valuation had expanded from approximately ₦30 trillion to more than ₦160 trillion, which he cited as an indication of improved investor participation and market performance.

He expressed confidence in the medium-term prospects of the naira, pointing to stronger foreign exchange reserves and improvements in key economic fundamentals as factors supporting currency stability.

He stated that council considered and adopted the resolution to ensure that priorities must be to focus on bringing inflation to a single digit by the end of 2027 or before then, and that we need to ensure that we raise the standard of living.

He said the federal government is working to ensure that food prices are stable and even come down, particularly for the staple food.

“Council adopted a resolution that our focus should be on investment in critical infrastructure and enabling investment in human capital in our grid and those things that will raise the living standard for our people and create decent jobs.

“Council also agreed that we endorse the five priorities of the National Economic Council. For those of you follow this, you would have noticed that the last National Economic Council meeting there was a 90-day plan that was approved”

So, this $21.7bn investment would b used to support social sector.

He noted that the concessionary loans with interest rates of just about 2% average will be used to fund projects that “cut across investments in energy, social protection, agriculture, climate, education, and health.

“There is strong development partner support with about $7.9 billion dollars of that coming from multilateral and bilateral partners led by the World Bank, $5 billion US dollars at concessional rates, average 2.1%. In addition to that, we have regional DFIs, development finance institutions, export credit agencies and banks, and even for the commercial component has average indicative rate of 7.8%, which is even below the rates for our eurobond of November 2025,” he said.

“It is important to note, that this amount is not up for the federal government alone. The federal government has the responsibility and the constitutional duty to be the interface for all external borrowing. So $3.3 billion of this amount is actually for states and the FCT projects of $1.5bn, . So that states plus FCT together, have $4.8 billion for the subnational and some agencies and development finance institutions.”