Credit expert warns Tinubu: Asset-backed funding beats borrowing for $1T economy target
Credit administration fellow Asiwaju Busari Shaamsuddeen Akande warns President Tinubu that heavy borrowing for infrastructure risks a debt trap that could derail Nigeria's $1 trillion economy goal by 2030. The Certified Islamic Finance Executive urges the Federal Government to pivot to asset-backed financing, public-private partnerships, and sovereign Sukuk instead of conventional loans.
Akande argues that borrowing for projects with long gestation periods creates a dangerous mismatch: debt servicing starts immediately while returns take years. He notes high government borrowing costs also crowd out private sector lending, as banks prefer risk-free government securities over business loans.
The expert insists infrastructure must connect directly to industrial and agricultural production hubs so SMEs actually benefit. He also wants mechanisms to channel project revenues toward debt reduction. Success, he says, depends not on spending volume but on investment productivity, equitable opportunity access, and disciplined debt management.
With Tinubu reportedly pursuing more external loans, will asset-backed models deliver needed infrastructure without the debt overhang, or will conventional borrowing continue because it's politically easier?