The Federal Government has offered clarifications regarding President Bola Tinubu’s request to the National Assembly for approval of a new $21.5 billion external borrowing plan, part of the proposed 2025-2026 borrowing strategy.
In a press statement issued on Tuesday by the Director of Information and Public Relations at the Federal Ministry of Finance, Mohammed Manga, the government explained that the Debt Rolling Plan serves as a structured framework for external borrowing by both federal, state, and local governments over a two-year period.
The statement read, in part, “The proposed Debt Rolling Plan outlines the external borrowing framework for both the federal and sub-national governments over a two-year period.”
“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 statement stated further.
“This strategic method enhances Nigeria’s ability to implement effective fiscal policies and mobilize development resources.”
The government emphasized that the plan does not automatically translate to an increase in the nation’s debt burden.
“The majority of the proposed borrowing will 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 institutions offer concessional financing with favorable terms and long repayment periods, thereby supporting Nigeria’s development objectives sustainably,” the statement added.
FG reaffirms commitment to critical investments
The Federal Government reiterated its dedication to fostering rapid, inclusive, and sustainable economic growth through strategic investments.
“Achieving this vision requires substantial investment in critical sectors such as transportation, energy, infrastructure, and agriculture,” Manga stated.
“These investments will lay the groundwork for long-term economic diversification and encourage private sector participation.”
He further clarified the government’s debt management strategy: “Our debt strategy is therefore guided not solely by the size of our obligations, but by the utility, sustainability, and economic returns of the borrowing. Ensuring that all borrowed funds are efficiently utilized and directed toward growth-enhancing projects remains a top priority.”
The statement stated further that the government remains committed to keeping borrowing within manageable and sustainable limits.
Backstory
On Tuesday, President Tinubu requested the Senate to approve a new external borrowing plan of about $21.5 billion as part of the 2025-2026 borrowing plan.
The president also sought the approval of the senate for a loan request of 15 billion Japanese Yen and a 51 million Euros grant.
He explained that the initiatives were aimed at generating employment, promoting skill acquisition, fostering entrepreneurship, reducing poverty, and enhancing food security.
The President added that the majority of the projects and programmes would be implemented across the 36 states of the country.
He noted that amid declining domestic funding, it had become essential to pursue prudent external borrowing, saying that a vast financial resource was needed to address the infrastructure gap across the country.
What you should know
Nigeria recently announced the full repayment of the $3.4 billion emergency loan obtained in 2020 from the International Monetary Fund (IMF).
As of December 2024, total foreign debt stood at $44.9 billion, with the top five creditors being:
- Eurobond holders – $17.32 billion
- World Bank (IDA) – $16.56 billion
- Exim Bank of China – $5.06 billion
- African Development Bank (AfDB) – $2.10 billion
- IBRD (World Bank) – $1.24 billion
