N45tn external borrowing plan is strategic, says FG

By Kunle Sanni

The Ministry of Finance has clarified that the recent external borrowing request submitted by President Bola Tinubu to the National Assembly is part of a structured, medium-term borrowing framework, rather than an automatic increase in Nigeria’s debt burden.

The multi-currency loan proposal amounts to approximately $23.5 billion, €2.265 billion, ¥15 billion, and ₦757.9 billion.

According to a statement issued on Tuesday by the Ministry’s Director of Information and Public Relations, Mohammed Manga, the borrowing plan forms a key component of the 2024–2026 External Borrowing Rolling Plan, which outlines the financing needs of both federal and sub-national governments over two years.

The statement noted that the financing request—estimated at ₦45 trillion in naira terms—represents one of the most ambitious external financing initiatives of President Tinubu’s administration to date.

It also includes a proposal to raise an additional $2 billion from the domestic debt market to support the implementation of a new local issuance programme for foreign currency-denominated financial instruments.

The Ministry emphasised that the borrowing framework does not amount to immediate or blanket debt accumulation. Rather, it is a strategic, forward-looking tool designed to facilitate effective financial planning and ensure alignment with Nigeria’s Medium-Term Expenditure Framework (MTEF), in accordance with the Fiscal Responsibility Act, 2007, and the DMO Act, 2003.

“The Borrowing Rolling Plan does not equate to actual borrowing,” Manga stated. “The actual borrowing for each year is captured in the annual budget, and for 2025, the external borrowing component is $1.23 billion, which is planned for drawdown in the second half of the year.”

Projects tied to the borrowing span critical sectors, including infrastructure, health, education, energy, water supply, power transmission, food security through irrigation, fibre optics expansion, defence, and transportation. Many of the projects have multi-year drawdown schedules—typically ranging from five to seven years—further easing pressure on Nigeria’s short-term fiscal outlook.

Manga further disclosed that most of the funds will be sourced from concessional lenders and development partners such as the World Bank, African Development Bank, French Development Agency, European Investment Bank, JICA, China Eximbank, and the Islamic Development Bank. These institutions offer low-interest, long-tenure loans, which the government says support sustainable development.