The federal government on Wednesday clarified that its recently-submitted 2024–2026 external borrowing rolling plan is primarily aimed at securing concessional loans from multilateral development partners, rather than increasing commercial debt exposure.
In a statement, the Federal Ministry of Finance emphasised that the multi-year borrowing framework, sent on Tuesday to the National Assembly for approval, is designed to fund critical infrastructure projects across key sectors with favorable financing terms, ensuring sustainable debt management and supporting the country’s broader economic recovery goals.
It explained that the plan is a strategic, multi-year blueprint rather than an immediate accumulation of new debt, and outlines proposed borrowing for both the federal and sub-national governments over a three-year period.
It forms a key component of Nigeria’s Medium-Term Expenditure Framework (MTEF), in line with the Fiscal Responsibility Act (2007) and the Debt Management Office (DMO) Act (2003).
In the statement, the finance ministry sought to quell public concern around the nation’s rising debt profile, stating that the borrowing plan is “not synonymous with actual debt.” Instead, it is a forward-looking financial strategy designed to support comprehensive fiscal planning and reduce reliance on ad hoc or reactive borrowing.
For the fiscal year 2025, the plan includes a proposed $1.23 billion in external financing, which has not yet been drawn and is scheduled for the second half of the year. The ministry emphasised that all borrowing under the plan is project-tied, with disbursements aligned to implementation timelines rather than occurring upfront.
“Borrowings are spread over the duration of the projects,” the statement said. “Many of these projects involve drawdowns over 5–7 years, allowing for better fiscal control and planning.”
The borrowing will support key sectors of the economy, including power grids and transmission lines, irrigation for improving food security, fibre optics network across the country, fighter jets for security, and rail and road infrastructure.
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Beneficiaries under the plan are for both federal and several state governments across numerous geopolitical zones, including Abia, Bauchi, Borno, Gombe, Kaduna, Lagos, Niger, Oyo, Sokoto, and Yobe states.
Most of the external financing will be sourced from Nigeria’s multilateral and bilateral development partners. These include the World Bank, African Development Bank (AfDB), China EximBank, Islamic Development Bank, French Development Agency (AFD), and Japan International Cooperation Agency (JICA).
According to the government, these institutions offer concessional loans with favourable interest rates and long repayment periods.
The ministry underscored that Nigeria’s debt strategy has shifted from size-based assessments to a more nuanced view centered on sustainability, economic impact, and long-term returns.
“It is not the size of the debt, but its utility and the quality of its deployment that matters,” the statement read.
Nigeria’s public debt hit record levels in recent years, with the debt service-to-revenue ratio peaking at over 90 percent in 2023, sparking warnings from economists and international financial institutions.
However, the Tinubu administration claims progress has been made in reducing fiscal strain. The controversial use of Central Bank of Nigeria (CBN) overdrafts, known locally as ‘Ways and Means,’ has been discontinued, and reforms are underway to enhance government revenue collection.
The government said it expects increased earnings from the Nigerian National Petroleum Corporation (NNPC) and improved remittances from Government-Owned Enterprises (GOEs). Technology-driven monitoring systems are being deployed to ensure accountability and capture outstanding legacy revenues from ministries and agencies, it noted.
“The goal is to stabilize the macroeconomy and create a runway for rapid, inclusive growth,” the Finance Ministry noted. “Investment in core infrastructure and productivity-enhancing sectors is central to this vision.”
Debt sustainability remains a guiding principle. According to the ministry, the borrowing plan will stay within the thresholds defined by the Debt Sustainability Framework of the DMO, with regular reviews and legislative oversight.
“The government remains committed to transparency, fiscal discipline, and accountability,” the release concluded, adding that public engagement will be a core part of the borrowing strategy moving forward.
