By Lizzy Chirkpi
As President Bola Ahmed Tinubu seeks National Assembly approval for fresh external loans totalling $20.52bn and €1.045bn, former federal lawmaker, Dr Farah Dagogo, has warned against accumulating debt without clear economic benefits and a credible repayment plan.
Dagogo, a former member of the House of Representatives, energy policy advocate and public affairs commentator, said borrowing could be a legitimate instrument of national development, provided the government demonstrated that the proposed loans were economically justified, legally compliant and supported by transparent financing arrangements.
He also questioned the Federal Government’s proposal to use legislation to protect its economic policies from reversal by future administrations, arguing that no ordinary Act of the National Assembly could permanently prevent a future legislature from exercising its constitutional powers.
In an interview with Pointblanknews.com, Dagogo said the government should focus on building credible institutions, demonstrating the benefits of its policies and managing public finances responsibly rather than attempting to make its preferred economic direction irreversible.
His comments come as the Tinubu administration seeks legislative approval for substantial external borrowing while considering a law-backed framework to promote policy consistency across successive administrations.
The developments have renewed debate over executive powers, legislative oversight, fiscal responsibility and the long-term consequences of economic decisions.
The $21.7bn borrowing question
On Tuesday, October 27, 2026, President Tinubu asked the National Assembly to approve a supplementary external borrowing plan comprising $20.52bn and €1.045bn for the 2026–2027 fiscal period.
The request, conveyed in a letter read by Senate President Godswill Akpabio during plenary, is intended to finance projects and programmes in critical sectors, including infrastructure, power, transportation, agriculture, healthcare, education, water supply, security, employment generation and public financial management reforms.
In the letter, Tinubu said the funds would be directed primarily towards critical infrastructure projects, particularly in power, transportation and healthcare.
He argued that Nigeria needed substantial financing to bridge its infrastructure deficit, address funding gaps and support economic growth.
“In light of the need for significant infrastructure investment in the country and the vast financial resources needed to address this gap, it has become essential to pursue broader external borrowings to close the financing shortfall,” he said.
The Senate subsequently referred the request to the relevant committees on local and foreign debts and appropriations for further scrutiny.
The scale of the proposed borrowing has, however, renewed concerns about Nigeria’s debt obligations, the transparency of government borrowing and whether the expected returns will justify the financial commitments.
For Dagogo, the central issue is not whether Nigeria should borrow but whether the government can establish a clear link between the funds being sought, the projects to be executed and the benefits Nigerians stand to gain.
“The scale of the proposed financing is substantial, and that alone makes rigorous scrutiny indispensable,” he said.
He noted that borrowing could be justified where it financed productive infrastructure capable of delivering lasting economic and social benefits. Spreading the cost of long-term projects over time, he added, could be more appropriate than attempting to finance them entirely from current revenue.
However, he cautioned that external loans must have competitive terms, manageable repayment obligations and investments capable of generating sufficient economic returns or measurable public benefits.
Borrowing, he stressed, must not become a substitute for fiscal discipline, improved domestic revenue mobilisation, efficient public expenditure or responsible debt management.
Dagogo urged the National Assembly to look beyond the list of sectors the government intends to support and demand detailed information on the specific projects, financing arrangements, implementation schedules and repayment obligations.
He said lawmakers should establish which projects would receive the funds, how much would be allocated to each, who the lenders were and what interest rates, commitment fees, arrangement fees, grace periods and repayment schedules applied.
He also called for measurable projections of the loans’ expected effects on productivity, employment, revenue generation, public services and poverty reduction.
The former lawmaker identified foreign exchange risk as another major concern, noting that a significant depreciation of the naira could increase the domestic-currency cost of servicing the loans and place additional pressure on government revenue and future budgets.
He therefore urged the government to explain how it intended to manage the exposure and meet its obligations without undermining essential public expenditure.
Dagogo also questioned whether the government had adequately considered alternative sources of financing, including concessional development loans, public-private partnerships, improved revenue collection, appropriate domestic financing and the reprioritisation of existing expenditure.
Beyond the terms of the loans, he warned that poor project execution could undermine their economic value.
He said delays, cost overruns, procurement abuses and the inability of ministries, departments and agencies to deliver projects efficiently could leave the country with substantial liabilities without the public assets needed to justify them.
“These are not procedural formalities,” he said. “They are central to determining whether borrowing will produce sustainable development or leave future generations with substantial liabilities and inadequate public assets.”
He maintained that the Federal Government must demonstrate not merely that Nigeria needs infrastructure but also that the proposed financing represents a prudent and transparent way to provide it.
Questions over previous borrowing approvals
Dagogo also called for a reconciliation of the latest request with previous borrowing approvals and existing financing arrangements.
He noted that public reports had indicated that Senate President Akpabio referred to the borrowing programme’s inclusion in earlier budgetary and borrowing arrangements.
According to him, this makes a detailed reconciliation necessary, although it does not, in itself, establish that the current request is duplicative or unlawful.
He urged the National Assembly to determine whether the proposal involved entirely new financing, the implementation of previously approved borrowing, an extension or restructuring of an existing programme, or additional approval for financing already contemplated under an earlier plan.
He called for a reconciliation schedule showing the original approvals, amounts committed, funds already drawn, undisbursed balances, outstanding obligations and any additional financing now being sought.
Such information, he said, would enable lawmakers to establish the relationship between existing commitments and the supplementary borrowing before making a decision.
Dagogo insisted that legislative oversight must be evidence-based, with the executive providing sufficient information for lawmakers to assess the full financial implications of the proposal.
Legal requirements for borrowing
On the legal framework governing the proposed loans, Dagogo said the government must demonstrate compliance with the relevant statutory requirements in addition to establishing their economic viability.
He cited Section 21 of the Debt Management Office (Establishment, etc.) Act, 2003, which provides for the terms and conditions of external loans to be laid before and approved by a resolution of the National Assembly before the Minister of Finance may approve or obtain them, subject to the applicable provisions of the Act.
He also referred to Section 44 of the Fiscal Responsibility Act, 2007, concerning the purposes of borrowing, cost-benefit analysis, prior authorisation and the application of borrowed funds to long-term capital expenditure.
These provisions, he argued, mean that general assurances about national development cannot replace a proper assessment of the financing arrangements and their economic justification.
He urged the Senate and the House of Representatives to insist on updated projections covering debt servicing, government revenue, foreign exchange exposure and the potential consequences of adverse economic conditions.
The assessment, he said, should consider the effects of lower oil revenue, weaker economic growth, higher interest rates, currency depreciation and unexpected expenditure pressures.
“The Senate and the House of Representatives should not approve the programme solely on the strength of the government’s assurances or the importance of the sectors listed,” Dagogo said.
He maintained that the facilities should be approved only after the government had demonstrated legal compliance, economic value, transparent financing terms and a credible repayment plan.
Where material information was missing, he said, lawmakers should demand clarification before approval. Where a facility failed to meet applicable legal requirements or presented unacceptable fiscal risks, the National Assembly should require revisions or withhold approval, as appropriate.
Dagogo warned that the pursuit of development must not become an excuse for accumulating obligations without adequate accountability.
“Borrowing must be a bridge to sustainable development, not a substitute for revenue reform, fiscal discipline and accountable governance,” he said.
Tinubu’s economic policies and constitutional limits
Dagogo also criticised the Federal Government’s proposed law-backed economic policy framework, describing the administration’s tax reforms as anti-people.
At the 32nd Nigerian Economic Summit in Abuja on October 26, Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed that the government was considering a framework intended to promote policy consistency across successive administrations.
The proposed framework is expected to guide decisions on taxation, tariffs, subsidies, investment and industrial development.
The government’s position is that abrupt policy reversals can undermine investor confidence, disrupt economic planning and weaken the effectiveness of long-term reforms.
The debate has gained significance following the removal of the petrol subsidy in 2023 and the introduction of sweeping tax reforms under the Tinubu administration.
Oyedele has argued that institutionalising economic policy principles could make them more enduring rather than leaving major policy decisions vulnerable to changes in administration.
Dagogo, however, questioned whether an ordinary law could prevent a future elected government from changing the economic direction of the country.
“With due respect, I believe this proposal requires careful constitutional consideration,” he said.
“There is an important distinction between providing a sound statutory foundation for economic policies and attempting to make those policies permanently irreversible by future governments.”
He cited Sections 4, 58 and 59 of the 1999 Constitution, which establish legislative powers and prescribe the procedures through which bills become law at the federal and state levels.
Dagogo acknowledged that the National Assembly could enact laws governing taxation, petroleum regulation and other economic matters within its constitutional competence.
Such legislation, he said, could establish enforceable obligations and provide institutional frameworks for implementing government policies.
However, he stressed that an ordinary Act of the National Assembly could not be made permanently immune from amendment or repeal by a future legislature.
“No ordinary Act of the National Assembly can permanently deprive a future National Assembly of its constitutional power to amend or repeal that legislation,” he said.
The former lawmaker clarified that an incoming administration could not simply disregard a valid existing law because it disagreed with the policy behind it.
Equally, a future National Assembly would retain the power to amend or repeal an ordinary law through the constitutionally prescribed process.
He argued that the distinction was fundamental to representative democracy and the rule of law, adding that policy stability should be achieved through strong institutions, credible implementation and demonstrable public benefits rather than attempts to foreclose future legislative choices.