The Nigerian Federal Government has shed light on President Bola Ahmed Tinubu's recent request to the National Assembly for the approval of the country's 2024–2026 External Borrowing Rolling Plan. This isn't an immediate plunge into more debt, but rather a carefully considered element of Nigeria's overall financial strategy, aligning with the Medium-Term Expenditure Framework and crucial fiscal legislation like the Fiscal Responsibility Act of 2007 and the Debt Management Office Act of 2003. This comprehensive plan, submitted to the legislature on May 27, 2025, encompasses proposed borrowings for both the federal government and various states, complete with detailed appendices outlining associated projects, terms, and implementation schedules.
According to the Ministry of Finance, this proactive approach to financial management is designed to foster efficiency and eliminate the kind of ad hoc borrowing that can lead to inefficiencies. By doing so, Nigeria aims to strengthen its capacity to enact effective fiscal policies and attract vital development resources. It's crucial to understand that the plan itself doesn't trigger immediate borrowing. The actual borrowing component allocated for 2025, amounting to US$1.23 billion, is already integrated into the annual budget and has not yet been drawn, with disbursement anticipated in the latter half of the year.
Several states are poised to benefit from this plan, including Abia, Bauchi, Borno, Gombe, Kaduna, Lagos, Niger, Oyo, Sokoto, and Yobe. The majority of these borrowings are tied to specific projects and will unfold over extended periods, typically spanning five to seven years. The investments are strategically directed towards key sectors vital for national development, such as improving national power grids, bolstering food security through irrigation projects, expanding fiber optics infrastructure, acquiring security aviation assets, and advancing transportation initiatives, including both rail and road developments.
The government emphasizes that the bulk of these funds will be secured from reputable development partners like the World Bank, African Development Bank, French Development Agency, European Investment Bank, JICA, China EximBank, and the Islamic Development Bank. These institutions are known for offering concessional terms and extended repayment windows, thereby facilitating sustainable development financing for Nigeria.
Addressing prevailing concerns about escalating debt levels, the government has provided assurances, highlighting a notable decline in Nigeria’s debt service-to-revenue ratio from its peak of over 90% in 2023. This improvement is expected to be further bolstered by anticipated revenue enhancements, particularly from increased remittances by Government-Owned Enterprises (GOEs), the Nigerian National Petroleum Corporation (NNPC), and through the implementation of digitized revenue tracking mechanisms. With a gradual restoration of macroeconomic stability, the government's primary focus is now firmly on guiding the economy towards rapid, sustained, and inclusive growth. The investments outlined in the borrowing plan are specifically designed to stimulate long-term diversification and actively encourage private sector participation.
Reaffirming its unwavering commitment to fiscal discipline and transparency, the government stresses that all borrowing activities will strictly adhere to the framework of the Debt Management Office’s Debt Sustainability Analysis. In conclusion, the Ministry of Finance has pledged continuous engagement with all stakeholders, underscoring the critical role of constructive public discourse and robust legislative oversight in realizing Nigeria’s ambitious economic aspirations.
