FG clarifies 2024–2026 external borrowing plan

The Federal Government has moved to clarify concerns surrounding President Bola Ahmed Tinubu’s recent request to the National Assembly seeking approval for Nigeria’s 2024–2026 External Borrowing Rolling Plan.

In a press statement issued on Wednesday, May 28, by the Director of Information and Public Relations at the Federal Ministry of Finance, Mohammed Manga, the government emphasized that the borrowing plan is a strategic framework, not an immediate loan request. The plan, submitted on May 27, outlines a forward-looking borrowing structure for both the federal and state governments, designed to support critical development projects across the country.

According to the ministry, the plan is part of Nigeria’s Medium-Term Expenditure Framework (MTEF) and is in full compliance with the Fiscal Responsibility Act 2007 and the DMO Act 2003. It aims to streamline Nigeria’s debt management strategy by eliminating ad hoc borrowing and promoting a more organized, fiscally responsible approach to development financing.

“The borrowing plan does not equate to actual borrowing for the period,” the statement clarified. For instance, the external borrowing figure included in the 2025 budget is $1.23 billion and has not yet been accessed. The disbursement is projected to occur in the second half of the year.

The government further explained that the loans in the plan are largely tied to multi-year projects across essential sectors, such as national grid upgrades, agricultural irrigation, security hardware including fighter jets, fibre optic expansion, and large-scale transport infrastructure. Importantly, these projects span various states including Lagos, Kaduna, Abia, Gombe, Niger, and Sokoto.

Manga also stressed that a significant portion of the proposed borrowing would be sourced from reputable international development partners, such as the World Bank, African Development Bank, French Development Agency, China EximBank, and the Islamic Development Bank. These loans are typically concessional — meaning they come with favorable interest rates and extended repayment periods — ensuring the long-term sustainability of Nigeria’s debt obligations.

Addressing concerns about the nation’s debt profile, the Ministry noted that Nigeria’s debt service-to-revenue ratio, which previously spiked to over 90% in 2023, is now on a downward trend. The government attributes this improvement to the discontinuation of inflationary borrowing practices through Ways and Means advances, and a stronger focus on revenue mobilization.

“There are significant revenue expectations from the NNPC and technology-driven efforts to recover surpluses from Government Owned Enterprises and other MDAs,” the statement added.

With recent macroeconomic stabilization, the Federal Government says it is now focused on building a foundation for long-term, inclusive economic growth. According to the Ministry, this will require heavy but targeted investments in key areas like energy, agriculture, and transport, which will also encourage private sector participation.

“Our debt strategy is guided not solely by the size of our obligations but by the utility, sustainability, and economic returns of the borrowing,” the Ministry emphasized, assuring Nigerians that every loan drawn would be channeled into productive, growth-enhancing ventures.

In conclusion, the Ministry reaffirmed the government’s commitment to prudent borrowing, debt sustainability, and transparency, while urging public stakeholders and lawmakers to maintain constructive engagement and oversight in the implementation of the plan.