FOREIGN LOANS AND INFRASTRUCTURE DEVELOPMENT IN NIGERIA

Abstract

This study critically interrogates the impact of foreign loans on infrastructure development in Nigeria, particularly transport and power infrastructure. Anchored on modernization theory, it adopted explanatory design. The study adopted documentary method of data collection which includes official publications, academic literature, and reputable media reports. Content analysis was used to identify patterns in the data collected. The findings revealed that while foreign loans facilitated significant progress in key transport projects such as the Lagos-Ibadan and Warri-Itakpe rail lines and the Lekki Deep Sea Port, and attracted substantial power sector investments, outcomes were hindered by disbursement delays, dependency on Chinese bilateral financing, and weak institutional coordination. The persistent gap between financial inputs and developmental outputs underscored governance inefficiencies and fiscal indiscipline. The study concludes that although foreign loans remain essential for bridging Nigeria’s infrastructure financing gap, their long-term efficacy depends on institutional reform and strategic diversification. It therefore recommends transparent procurement processes, reduced reliance on bilateral lenders, and the establishment of an autonomous coordinating agency to improve project execution. Additionally, it advocates for local content enforcement and domestic revenue reform to support sustainable infrastructure development and reduce loan dependency.