Nigeria has introduced a ₦2.5 trillion National Infrastructure Bond, a major financing instrument designed to ease pressure on the federal budget while unlocking long-term capital for critical national projects. The announcement was made in Abuja yesterday following an economic strategy session between the Ministry of Finance, the Infrastructure Corporation of Nigeria (InfraCorp), and leading private-sector financiers.
The new bond, which will be issued in phases beginning in Q1 2026, is positioned as one of the largest single domestic financing strategies undertaken by the Federal Government in recent years. Officials say the program is intended to address persistent delays in the execution of transport, energy, water, and technology infrastructure that continue to constrain national productivity.
According to details first highlighted in a report by BusinessDay, the initiative is tied to the administration’s long-term Growth Acceleration Framework, which prioritizes stable financing sources, blended public-private partnerships, and a shift away from short-term borrowing to support infrastructure growth.
A Shift Away From Budget-Dependent Infrastructure Spending
Over the past decade, Nigeria’s infrastructure deficit has widened, with experts estimating that the country requires more than $100 billion in annual investments to bridge the gap in transport, power, housing, and public utilities. However, federal budget allocations for capital projects have remained insufficient, often constrained by competing obligations such as debt servicing, personnel costs, and recurrent expenditures.
Finance Minister Wale Edun, speaking during the launch event, emphasized that the bond represents a strategic shift:
“We can no longer continue to fund infrastructure solely from yearly capital budgets. This bond is part of a structured move towards sustainable, long-term financing capable of supporting the scale of infrastructure that Nigeria urgently needs.”
The minister added that infrastructure remains one of the strongest drivers of economic output and private-sector expansion. “Every kilometer of rail built, every megawatt of electricity added, every major road completed contributes significantly to growth, productivity, and job creation,” he said.
What Makes the New Bond Different
Unlike previous infrastructure bonds issued through the Debt Management Office (DMO), the new instrument is designed as a blended-financing model coordinated by InfraCorp. The structure integrates:
• FG partial guarantees to lower investor risk
• Institutional investor participation (pension funds, sovereign wealth funds, insurance firms)
• Corporate co-investment, especially from telecom and logistics companies
• Potential subscription from multilateral institutions, including the AfDB and IFC
• Tenor flexibility, allowing long-term maturities up to 25 years
• Project-tied disbursement instead of general budgetary allocation
InfraCorp CEO Dr. Lazarus Angbazo noted that the bond would prioritize sectors with immediate economic multipliers, such as highway corridors, bridges, gas-to-power infrastructure, industrial parks, and national digital backbone networks.
Projected Impact on the Economy
Economists say the infrastructure bond could significantly strengthen Nigeria’s medium-term economic outlook. If executed efficiently, analysts forecast improvements in:
1. GDP Growth:
Infrastructure expansion could contribute 1–1.4% to annual GDP over the next five years.
2. Employment:
Large construction activities could generate more than 900,000 direct and indirect jobs, particularly in road construction, power transmission, and public transportation.
3. Foreign Direct Investment:
A structured bond gives foreign investors a stable entry mechanism, especially those seeking long-term exposure to African infrastructure.
4. Exchange Rate Stability:
Better infrastructure boosts local productivity, reduces import dependence, and supports Nigeria’s ambition to strengthen the naira.
Concerns Over Transparency and Fund Mismanagement
Despite broad support, some industry observers have warned about governance risks. Nigeria’s track record with infrastructure funds has sometimes been marred by project delays, cost overruns, and poor supervision.
Civil society organizations have urged the government to ensure strict transparency protocols, including:
• Mandatory quarterly public disclosures
• Independent third-party monitoring
• Clear project-by-project disbursement reports
• Stakeholder participation from host communities
Policy analyst Dr. Folashade Banwo noted that “A bond of this size must not be treated as another regular government borrowing instrument. Nigerians need to know where every naira goes.”
What Happens Next
The Debt Management Office will issue the formal schedule for subscription in coming weeks, while InfraCorp finalizes the list of priority projects in collaboration with the Ministry of Works, Ministry of Power, and Ministry of Transportation.
If fully subscribed, the ₦2.5 trillion bond could transform Nigeria’s infrastructure landscape and support a strong recovery path for the economy over the next decade.
