FG clarifies $1.23bn loan plan, cites infrastructure push

The Federal Ministry of Finance has provided clarification on Nigeria’s 2024–2026 External Borrowing Rolling Plan following President Bola Ahmed Tinubu’s formal request for legislative approval submitted to the National Assembly on May 27, 2025.

In a press statement issued on Wednesday, by Mohammed Manga, FCAI, Director of Information and Public Relations, the Ministry stated that the proposed Borrowing Rolling Plan is a critical aspect of Nigeria’s Medium-Term Expenditure Framework (MTEF), developed in accordance with the Fiscal Responsibility Act 2007 and the Debt Management Office (DMO) Act 2003.

According to the Ministry, the borrowing plan is not the same as actual borrowing. Instead, it provides a structured framework for both federal and sub-national governments to plan external borrowing over a three-year period, with detailed appendices outlining project terms, implementation timelines, and other relevant details.

“The proposed Borrowing Rolling Plan is an essential component of the Medium-Term Expenditure Framework in accordance with both the Fiscal Responsibility Act 2007 and the DMO Act 2003,” the statement read.

“By adopting a structured, forward-looking approach, the plan facilitates comprehensive financial planning and avoids the inefficiencies of ad hoc or reactive borrowing practices.”

The Ministry emphasized that for the year 2025, the external borrowing component is US $1.23 billion, which has not yet been drawn and is planned for the second half of the year. The plan also covers multiple state governments across the country, including Abia, Bauchi, Borno, Gombe, Kaduna, Lagos, Niger, Oyo, Sokoto, and Yobe States.

The government clarified that the borrowing plan does not represent an automatic increase in Nigeria’s debt burden. “The nature of the rolling plan means that borrowings are split over the period of the projects,” the Ministry noted, adding that many of the projects within the plan are designed for multi-year drawdowns ranging between five to seven years.

These include project-tied loans for critical sectors such as power, irrigation, fibre optic expansion, security (including fighter jets), rail, and road infrastructure.

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The Ministry said most of the proposed funds would be sourced from Nigeria’s development partners, including the World Bank, African Development Bank, French Development Agency, European Investment Bank, JICA, China EximBank, and the Islamic Development Bank.

These partners are known for offering concessional financing with long repayment terms, making them suitable for supporting Nigeria’s development sustainably.

Amid concerns about debt servicing, the Ministry announced improvements in Nigeria’s debt service-to-revenue ratio, stating that it has begun to decline from its 2023 peak of over 90%. The federal government, it added, has also ended reliance on “distortionary and inflationary ways and means.”

The statement pointed to revenue expectations from the Nigerian National Petroleum Corporation (NNPC), enhanced monitoring of Government Owned Enterprises, and collection of surpluses from revenue-generating agencies as part of ongoing financial reforms.

“Having achieved a fair degree of macroeconomic stabilization, the overarching goal of the Federal Government is to pivot the economy onto a path of rapid, sustained, and inclusive economic growth,” the statement continued.

The government reiterated that its borrowing strategy is guided not by the size of the debt but by the utility, sustainability, and expected economic returns. “Ensuring that all borrowed funds are efficiently utilized and directed toward growth-enhancing projects remains a top priority,” it said.

The Ministry concluded by reaffirming its commitment to keeping debt within sustainable limits through the DMO Debt Sustainability Framework, while advancing ongoing tax reforms and revenue initiatives.

The statement emphasized that fiscal discipline, transparency, and accountability are central to the administration’s economic agenda and called for continued legislative oversight and public engagement.