The Federal Executive Council has approved Nigeria's entire Asian Infrastructure Investment Bank (AIIB), said a government official to deepen the international economic cooperation and unlock funding for major infrastructure projects.
The approval formalin the status of Nigeria as a non-regional member of China's multilateral lender supported, joining more than 100 countries, including some from Europe and Africa. Nigeria received an invitation to join the AIIB in 2021 and have now completed the legal and financial obligations required for admission.
The financial minister and coordinating minister of the economy, Wale Edun, who showed the access memo, confirmed that Nigeria was subscribing to 50 institution shares of $ 100,000 per part, worth a $ 5 million equity stake. He described membership as a step towards attracting low interest, lasting capital for roads, powers, transportation, and other public infrastructure.
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“We concluded that the process is now, and we are completely members of the Asian Infrastructure Investment Bank,” Edun told journalists. “It is set up to promote infrastructure development and maintain economic growth in all its members.”
Is it more about accessing loans than reform?
Under official optimism lies the growing public reminding of Nigeria's true motivation to deepen its access to external borrowing -a path that has put an integral part of the country's future at the mercy of creditors and suspected the ability to fund homegrown development initiatives.
Analysts and economists are already alarming. While multilateral institutions such as AIIB may serve as an important partnership of infrastructure development, Nigeria's track record with concession loans and foreign partnerships has been checkered on failed projects, opaque acquisition skills, and increasing debt obligations.
Against this backdrop, two of Africa's most respected voices in the international economy – Dr. Akowumi Adesina, president of the African Development Bank, and Dr. Ngozi Okonjo-Iiweala, Director-General of the World Trade Organization, has repeatedly warned that African countries should move from a dependency on loans and assistance.
Adesina is especially red, claiming that the continent is “not difficult” but “struggling through its failure to use its wealth.” He urged countries like Nigeria to develop their wide natural resources, rather than constantly looking for loans to supply infrastructure that did not return.
Similarly, Okonjo-iiweala has kept against debt and help, which is driving rather than in-deeper investment in local industries, regional trade, and exporting diversification. In the past forums, both have grieved the pattern of the African states, including Nigeria, who takes debt while doing little to improve domestic productivity or reduce importation.
“Africa needs to change its mindset about accessing help. We should start to see it as a thing of the past.”
“Instead of looking outside for financial support, we should strengthen our own institutions,” he urged.
The debt deficiency and infrastructure deficiency
Public debt to Nigeria stood approximately N144.67 trillion (US $ 91.46 billion) in Q1 2024. It represents a growth of 24.99% quarter-on-quarter from N97.34 trillion in Q4 2023. The Debt Management Office (DMO) report N144.67 trillion about December 31, 2024. Spend more than 60 percent of its debt delivery income, leaving a small room for capital investment.
However, with the extensive interval of Nigeria's infrastructure, which is estimated to be $ 100 billion annually -for a decade to close, government officials argue that platforms such as AIIB will help the GAP bridge with concession financing.
There is also a growing anxiety that the flow of foreign funds into the infrastructure sectors governed by Chinese and other foreign contractors has not been translated into the domestic capacity building or work creation.
However, the government is touting the ongoing reforms of the Tinubu administration to address the gaps. Edun, while speaking at the sides of Nigeria's recent attendance at IMF and World Bank Spring meetings in Washington, DC, said international institutions praised Nigeria's macroeconomic reforms, including removal of subsidies and unification of exchange rates. He noted that these efforts have helped stabilize the economy despite external shocks, such as recent rewards tariffs imposed by the United States.
Edun also mentioned a recent Nigeria credit outlook upgrade of Fitch Ratings, from B- to B, as evidence that the country's reform program is gaining traction.
However, the overcrowding of the Nigerian economy has difficulty believing in the government's considerations of economic reforms. Economists note that the path of Nigeria should not be determined by accessing foreign lending institutions, but by the ability to develop a self-sustaining economy rooted in productivity, increasing value, and exporting varying.
This means, in addition to developing extensive mineral deposits, creating policies that attract local and foreign investors to process raw materials indoors.
“We need to build our processing industries to create jobs, boost the intra-continental trade, and make sure we stop exporting raw materials without addition,” Iweala added.
