Expert cautions Tinubu against debt trap, seeks asset-backed infrastructure funding
Asiwaju Busari Shaamsuddeen Akande, a Fellow of the Institute of Credit Administration, has advised President Bola Tinubu to reconsider the government’s current approach to financing infrastructure projects, cautioning against an over-reliance on borrowing.
In a recent statement, Akande emphasized the importance of adopting asset-backed financing and engaging in public-private partnerships. He noted that Nigeria’s ambition to develop a $1 trillion economy by 2030 could be jeopardized if the government continues to accumulate debt without ensuring that infrastructure investments yield adequate economic returns.
His remarks come as President Tinubu seeks to secure additional external loans to fund various government initiatives. Akande suggested that the government should focus not only on the quantity of infrastructure projects but also on their potential to drive industrial output, stimulate business activity, and increase government revenue.
He warned that extensive borrowing for projects with lengthy gestation periods could lead to a disconnect between immediate debt obligations and the longer timeframe required for investments to produce returns. “Nigeria should reduce its dependence on conventional borrowing by exploring public-private partnerships and sovereign Sukuk financing,” Akande advised.
He explained that such funding arrangements would enable private investors to contribute to infrastructure development while sharing the related commercial risks. Additionally, Akande raised concerns that high government borrowing costs might deter commercial banks from extending credit to businesses, as financial institutions may opt to invest in government securities that offer more attractive returns.
Akande further underscored the necessity of linking infrastructure projects to industrial and agricultural production centers to ensure that local businesses, particularly small and medium-sized enterprises, benefit from these investments. He recommended that the government implement mechanisms to allocate a portion of the revenue generated from infrastructure projects towards reducing public debt.
As a Certified Islamic Finance Executive, Akande stressed that achieving the $1 trillion economic target hinges not solely on the scale of government expenditure, but also on the productivity of those investments, equitable access to economic opportunities, and effective public debt management.
