Nigeria’s 36 states and the Federal Capital Territory (FCT) are set to benefit from $4.8 billion of President Bola Tinubu’s proposed $21.7 billion external financing programme, despite a 288% increase in gross Federation Account revenue between 2021 and 2025.
The proposed financing has renewed questions about how state governments have deployed increased federal allocations and whether additional borrowing will translate into measurable improvements in infrastructure and public services.
According to BusinessDay’s report of October 29, 2026, the $4.8 billion allocation comprises $3.3 billion for state projects and approximately $1.5 billion for the FCT, based on disclosures by Finance Minister Taiwo Oyedele.
Tinubu is seeking National Assembly approval for $20,517,755,901 and €1,045,083,643 under the Federal Government’s 2026–2027 Supplementary External Borrowing Plan.
Senate President Godswill Akpabio read the President’s request during plenary on Tuesday, October 27, according to The PUNCH. The proposed financing is intended to support projects in infrastructure, agriculture, healthcare, education, water supply, security, employment generation and financial management reforms.
The Senate referred the request to its Committee on Local and Foreign Debts, working with the relevant appropriations committee, for consideration and a report within one week.
Speaking to State House correspondents after the Federal Executive Council meeting on Wednesday, October 28, Oyedele explained that the dollar and euro components amounted to approximately $21.7 billion when combined.
He said the programme was designed to finance productive investments and was not necessarily an indication that the government would immediately borrow or draw down the entire amount.
According to reports by BusinessDay and other media outlets, the financing covers federal and subnational projects, as well as some public agencies and development finance institutions.
The revenue figures have become central to the debate.
Agora Policy, in its analysis of Federation Account distributions published on October 27, reported that gross FAAC revenue increased from ₦9.23 trillion in 2021 to ₦35.81 trillion in 2025, representing a 288% rise.
The think tank also reported that gross revenue reached ₦31.46 trillion between January and September 2026, already exceeding the full-year totals recorded from 2021 to 2024. These figures are nominal and do not account for inflation.
Separately, figures presented by Oyedele at the Federal Executive Council meeting showed that net FAAC distributions to state governments increased from ₦15.2 trillion in 2024 to ₦21.9 trillion in 2025, representing a 44% increase.
The higher allocations have intensified scrutiny of state governments’ spending priorities, particularly whether increased revenue has translated into better roads, healthcare facilities, schools and other essential services.
In a separate October 29 report, BusinessDay highlighted the need for states to assess the costs, risks and repayment capacity of proposed projects before accepting additional external financing.
Former Vice-President Atiku Abubakar also criticised the borrowing request, arguing that the government should publish detailed information about the projects before lawmakers approve the financing. The African Democratic Congress presidential campaign council also described the proposal as reckless, according to reports by ThisDay.
Tinubu defended the programme in a statement dated October 29, arguing that the focus should be on the value generated by borrowed funds rather than the amount borrowed.
“The real question is not how much we borrow, but what we build, what value we create and what future we leave behind,” the President said.
He linked the proposed infrastructure investments to his administration’s ambition of building a $1 trillion economy by 2030, identifying major highways, electricity grid upgrades and modernisation of commercial ports among the projects expected to strengthen economic productivity.
The debate now extends beyond the size of the proposed financing to the accountability framework surrounding its implementation. The Senate committee’s review will be important in determining how clearly the government identifies the projects, their locations, costs and expected economic returns.
For state governments, the additional financing also raises questions about how they intend to use new borrowing alongside the substantial increase in revenue already received from the Federation Account.
