Finance minister calls for urgent shift to private capital as global aid declines….
Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has raised concerns over a growing global trend where developing nations are now paying more to service debt than they receive in financial support.
Speaking in Lagos on Monday during the Islamic Development Bank (IsDB) Group Day, Edun said the traditional model of development financing is under increasing strain, with external funding sources becoming less reliable.
According to him, overseas development assistance from advanced economies is steadily declining, leaving emerging markets and developing countries with fewer options to fund critical infrastructure and social investments.
Edun noted that the situation has reached a point where many countries are effectively sending more money out in debt repayments than they are receiving through aid, grants, or even foreign direct investment.
The minister said this reality makes it imperative for countries like Nigeria to rethink their approach to development financing by focusing more on domestic resource mobilisation and attracting private sector investment.
He stressed that partnerships, such as the newly signed country engagement framework with the IsDB, provide an opportunity to rethink how projects are structured and financed.
Rather than relying heavily on public funding or traditional loans, Edun called for a shift toward building “bankable” projects that can attract private capital at scale.
He emphasized the urgency of job creation, pointing out that Nigeria produces hundreds of thousands of graduates annually, all of whom need productive employment opportunities.
To achieve this, he said the country must move toward financing models that encourage risk-sharing, reduce investor exposure, and unlock new funding channels beyond conventional borrowing.
Edun also highlighted what he described as Nigeria’s transition from a period of economic stabilisation to one of growth, following a series of reforms introduced by the administration of President Bola Tinubu.
He pointed to early signs of improvement in key macroeconomic indicators, including easing inflation, stronger growth prospects, and a gradual return of investor confidence in domestic markets.
However, he cautioned that the global environment remains uncertain, with geopolitical tensions and shifting political dynamics posing risks to economic stability worldwide.
In this context, he said resilience would be critical, built on sound economic policies, strong institutions, and strategic international partnerships.
The minister further underscored the dominant role of the private sector in driving economic activity, noting that it accounts for the vast majority of the economy, far outweighing the contribution of the public sector.
He said this reality reinforces the need for government to act more as an enabler creating the right conditions for businesses to thrive rather than as the primary driver of growth.
Looking ahead, Edun revealed plans to deepen collaboration with key institutions within the IsDB Group, including those focused on private sector development and trade finance.
These partnerships, he explained, will support efforts to expand Nigeria’s capital markets, unlock value from public assets, and attract more private investment into critical sectors.
Also speaking at the event, Anasse Aissami, Director-General for Country Programs at the IsDB, reaffirmed the bank’s commitment to Nigeria, describing the country as a key partner in its global operations.
He noted that the bank’s interventions span multiple sectors, including agriculture, energy, healthcare, and education, with a focus on driving inclusive growth, job creation, and improved living standards.
Aissami added that the IsDB is keen to deepen engagement with Nigeria, not only through financing but also by fostering collaboration, sharing ideas, and aligning projects with the country’s long-term development priorities.
The discussions at the event reflect a broader shift in how developing economies are approaching growth moving away from dependence on external aid and toward more sustainable, investment-driven models anchored on private capital and strategic partnerships.
About the Author
