A former member of the House of Representatives and member of the African Democratic Congress, Dr. Farah Dagogo, in this interview speaks on the constitutional limits of economic policy entrenchment, external loans being taken by the President Bola Tinubu’s government, and sustainable alternatives to a blanket petrol subsidy regime. Adedayo Akinwale brings excerpts:
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has indicated that the Federal Government intends to pursue a law-backed economic policy framework to prevent future administrations from reversing petrol subsidy removal and tax reforms. What is your position on this proposal?
With due respect, I believe this proposal requires careful constitutional consideration. There is an important distinction between providing a sound statutory foundation for economic policies and attempting to make those policies permanently irreversible by future governments. Under Sections 4, 58 and 59 of the Constitution of the Federal Republic of Nigeria, 1999, legislative powers are vested in the National Assembly and the State Houses of Assembly within their respective constitutional jurisdictions. These provisions also establish the legislative procedures through which bills become law at the federal and state levels.
Where the National Assembly has the requisite legislative competence, it may enact laws governing taxation, petroleum regulation and other matters within its constitutional jurisdiction. Such laws provide legal certainty, establish enforceable obligations and create institutional frameworks for implementation.
However, the fact that a policy has been enacted into law does not make it constitutionally immune from subsequent amendment or repeal. The objective of economic reform should therefore be to establish clear, coherent and predictable rules that encourage investment, strengthen public institutions and promote long-term economic stability. It should not be to remove the lawful legislative discretion of future governments or deny future elected representatives the ability to respond to changing economic circumstances.
Can an Act of the National Assembly then permanently prevent a future government from reversing these policies?
No ordinary Act of the National Assembly can permanently deprive a future National Assembly of its constitutional power to amend or repeal that legislation.
A valid law remains binding until it is amended, repealed, invalidated by a competent court or otherwise ceases to have effect in accordance with the law.
An incoming administration cannot lawfully disregard an existing statute merely because it disagrees with the policy behind it. Equally, a future legislature may amend or repeal an ordinary statute through the constitutionally prescribed legislative process.
That is an essential feature of representative democracy and the rule of law. Consider the Petroleum Industry Act, 2021. It establishes a statutory framework for the petroleum industry, including provisions relating to petroleum pricing and market regulation. Those provisions have legal force, but they are not constitutionally irreversible. The National Assembly may amend the Act in accordance with the applicable legislative procedure.
The same principle applies to taxation. Nigeria’s 2025 tax reform legislation, including the Nigeria Tax Act, 2025 and the Nigeria Tax Administration Act, 2025, provides a statutory basis for significant changes to the country’s tax system.
The new framework took effect from January 1, 2026 in respect of the relevant provisions scheduled to commence on that date. Nevertheless, these laws remain subject to constitutional requirements, judicial interpretation and future legislative amendment. The fundamental distinction is between giving a policy the force of law and making it impossible for a future government to change it. The former is constitutionally permissible within the legislature’s competence; the latter cannot ordinarily be achieved by passing a conventional statute. If the government seeks genuine constitutional entrenchment, it must comply with the applicable amendment procedure under Section 9 of the Constitution, including the required legislative majorities and approvals of State Houses of Assembly, as applicable.
Even constitutional amendments must remain consistent with the Constitution’s own amendment requirements and other applicable constitutional limitations.
My position is that policy continuity should be secured through institutional credibility, transparent implementation, effective oversight, broad stakeholder consultation and demonstrable public benefits—not through an attempt to permanently bind the democratic choices of future administrations.
In a constitutional democracy, no administration should treat its policy preferences as permanently binding on its successors. Equally, no succeeding administration should disregard valid laws at will. Both the executive and the legislature must operate within the Constitution and the rule of law.
President Bola Tinubu has requested National Assembly’s approval for a supplementary external borrowing plan of approximately $20.52 billion and €1.045 billion for 2026–2027. Is the proposed borrowing justified?
The question must be examined from two distinct but related perspectives: economic justification and legal compliance. The reported request, presented to the National Assembly on Tuesday, 27 October 2026, covers proposed external financing for projects and programmes in infrastructure, power, transportation, agriculture, healthcare, education, water supply, security, employment generation and public financial management reforms. The proposal has been referred for legislative scrutiny.
The scale of the proposed financing is substantial, and that alone makes rigorous scrutiny indispensable. However, neither the size of the borrowing nor the government’s stated development objectives is sufficient, in isolation, to establish whether the proposal is economically justified. Borrowing can be a legitimate instrument of national development. Economies require significant investment in electricity, transport infrastructure, healthcare, water systems and other productive assets. Where a project delivers long-term economic and social benefits, financing it over time may be more appropriate than attempting to fund the entire cost from current revenue.
External borrowing may also be justified where the financing terms are competitive, the repayment profile is manageable and the projects generate sufficient economic returns or measurable public benefits. However, borrowing must not become a substitute for fiscal discipline, improved domestic revenue mobilisation, expenditure efficiency or responsible debt management. Before this proposal can be considered prudent, the government must demonstrate that the expected benefits justify the full cost and risks of the financing.
Critical questions must be asked such as, what specific projects will receive the funds? How much is allocated to each project, and what is the implementation timetable?
Also, we need to determine: who are the lenders? What are the interest rates, commitment fees, arrangement fees, grace periods, maturities, repayment schedules and other conditions? The economic and social returns must be spelt out.
What measurable improvements in productivity, employment, revenue generation, public services or poverty reduction are expected from each investment? Is the debt sustainable?
Can Nigeria meet the resulting repayment obligations without undermining essential public expenditure or creating excessive pressure on future budgets?
What is the Foreign-exchange exposure? Since the loans are denominated in foreign currencies, what would happen to debt-service costs if the naira depreciates significantly? Another is alternative financing? Has the government and its advisers compared the proposed loans with domestic financing, concessional development finance, public-private partnerships, improved revenue collection and the reprioritisation of existing expenditure?
Our Implementation capacity is also an area of concern. Do the relevant ministries, departments, agencies and state-level partners have the capacity to execute the projects efficiently and prevent cost overruns, delays and procurement abuses? These are not procedural formalities. They are central to determining whether borrowing will produce sustainable development or leave future generations with substantial liabilities and inadequate public assets.
What about the question of previous approvals?
I believe that is another matter that deserves particular attention: the relationship between this request and earlier borrowing approvals. Public reporting indicates that Senate President, Senator Godswill Akpabio, referred to the borrowing programme’s appearance in previous budgetary and borrowing arrangements. That observation makes reconciliation essential, but it does not, by itself, establish that the current request is duplicative or unlawful.
The National Assembly must establish whether the proposal represents entirely new financing, the implementation of previously approved borrowing, an extension or restructuring of an existing programme, or an additional approval for financing already contemplated in an earlier plan. The government should publish a reconciliation schedule showing the original approvals, amounts committed, funds drawn, undisbursed balances, outstanding obligations and any additional financing now being requested.
So my position is straightforward: Nigeria may legitimately borrow for development, but every borrowing proposal must be justified project by project, assessed against the country’s repayment capacity and subjected to transparent legislative oversight.
What legal principles govern the proposed external borrowing, and what should the Senate and the House of Representatives do before granting approval?
The first principle is that a presidential request for legislative approval does not, in itself, establish that every aspect of a proposed borrowing programme complies with the law. Equally, a large borrowing request is not automatically unconstitutional merely because of its size. The legal assessment must focus on the applicable statutory requirements, the terms of the proposed facilities, the purposes for which the funds will be used, the relevant appropriations and authorisations, and the procedures followed by the government.
Section 21 of the Debt Management Office (Establishment, etc.) Act, 2003 provides that the terms and conditions of external loans must be laid before and approved by a resolution of the National Assembly before the Minister of Finance may approve or obtain them, subject to the Act’s applicable provisions.
Section 44 of the Fiscal Responsibility Act, 2007 also establishes requirements concerning the stated purpose of borrowing, cost-benefit analysis, prior authorisation and the application of borrowed funds to long-term capital expenditure. These provisions make it clear that borrowing must be supported by more than a general statement of development intentions. The government must demonstrate the purpose, legal authorisation and economic rationale for the proposed financing.
The National Assembly should therefore insist on these safeguards before reaching a final decision.
The Debt Management Office and the Ministry of Finance should present updated projections covering debt service, government revenue, foreign-exchange exposure and the effects of adverse economic scenarios.
The assessment should consider the implications of lower oil revenue, weaker economic growth, higher interest rates, currency depreciation and unexpected expenditure pressures.
The executive should demonstrate that the proposed borrowing satisfies the relevant provisions of the Constitution, the Debt Management Office Act, the Fiscal Responsibility Act, applicable appropriation legislation and any other governing legal requirements. My position is that the Senate and the House of Representatives should not approve the programme solely on the strength of the government’s assurances or the importance of the sectors listed.