May 28, 2025
The Federal Government says it will continue to borrow within manageable and sustainable limits in accordance with the Debt Management Office (DMO) debt sustainability framework.
This is contained in a statement by the Director, Information and Public Relations in the Ministry of Finance, Mr Mohammed Manga, in Abuja on Wednesday.
President Bola Tinubu recently requested the approval of the 2024 – 2026 external borrowing rolling plan from the National Assembly.
Tinubu has requested the National Assembly’s approval to secure external loans of 21.5 million dollars and 15 billion Yuan, along with a grant of 65 million Euro, as part of the federal government’s proposed 2025–2026 external borrowing plan.
Manga said that the proposed borrowing plan was an essential component of the Medium-Term Expenditure Framework (MTEF) in accordance with both the Fiscal Responsibility Act 2007 and the DMO Act 2003.
“The plan outlines the external borrowing framework for both the federal and sub-national governments over a three-year period, accompanied by five detailed appendices on the projects, terms and conditions, implementation period, etc.
“By adopting a structured, forward-looking approach, the plan facilitates comprehensive financial planning and avoids the inefficiencies of ad-hoc or reactive borrowing practices.
“This strategic method enhances the country’s ability to implement effective fiscal policies and mobilise development resources,” he said.
According to the statement, the borrowing plan does not equate to actual borrowing for the period.
“The actual borrowing for each year is contained in the annual budget. In 2025, the external borrowing component is 1.23 billion dollars, and it has not yet been drawn.
“This is planned for H2 2025, the plan is for both federal and several state governments across numerous geopolitical zones including Abia, Bauchi, Borno, Gombe, Kaduna, Lagos, Niger, Oyo, Sokoto, and Yobe States.
“Importantly, it should be noted that the borrowing rolling plan does not equate to an automatic increase in the nation’s debt burden.
“The nature of the rolling plan means that borrowings are split over the period of the projects, for example, a large proportion of projects in the 2024–2026 rolling plan have multi-year drawdowns of between five to seven years which are project-tied loans,” Manga said.
He said that these projects cut across critical 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, rail and road infrastructure.
According to him, the majority of the proposed borrowing will be sourced from the country’s development partners, like the World Bank, African Development Bank, French Development Agency, European Investment Bank, JICA, China EximBank, and the Islamic Development Bank.
Manga said that these institutions offer concessional financing with favourable terms and long repayment periods, thereby supporting Nigeria’s development objectives sustainably.
He said that the government seeks to reiterate that the debt service to revenue ratio has started decreasing from its peak of over 90 per cent in 2023.
Manga said that the government has ended the distortionary and inflationary ways and means.
According to him, there is significant revenue expectations from the Nigerian National Petroleum Corporation Limited (NNPC Ltd), technology-enabled monitoring and collection of surpluses from government owned enterprises and revenue-generating ministries, departments, and agencies and legacy outstanding dues.
“Having achieved a fair degree of macroeconomic stabilisation, the overarching goal of the federal government is to pivot the economy onto a path of rapid, sustained, and inclusive economic growth.
“Achieving this vision requires substantial investment in critical sectors such as transportation, energy, infrastructure, and agriculture.
“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,” he said.
