The Federal Government has defended its proposed $24 billion borrowing initiative, assuring Nigerians that the plan does not translate to an immediate increase in the national debt burden.
In a statement issued on Wednesday, the Director of Information and Public Relations at the Federal Ministry of Finance, Mohammed Manga, clarified that the loans are project-specific and structured under a multi-year rolling plan spanning from 2024 to 2026.
According to Manga, the loans will be disbursed over time, typically within five to seven years, and are targeted at critical sectors such as power transmission, irrigation for food security, nationwide fibre optic deployment, security equipment including fighter jets, and rail and road infrastructure.
He emphasised that most of the proposed loans would be sourced from international development partners including the World Bank, African Development Bank, French Development Agency, European Investment Bank, Japan International Cooperation Agency (JICA), China Eximbank, and the Islamic Development Bank. These institutions, he noted, offer concessional financing with favourable terms and long repayment periods, supporting the country’s development agenda.
The government also revealed that the borrowing plan covers both federal and state-level projects, with at least 10 states—Abia, Bauchi, Borno, Gombe, Kaduna, Lagos, Niger, Oyo, Sokoto, and Yobe—slated to benefit.
“This borrowing plan does not imply immediate or full-scale borrowing,” Manga explained. “Actual borrowing is subject to annual budgetary allocations. For instance, the external borrowing for 2025 is projected at $1.23 billion and is scheduled for the second half of the year.”
Addressing concerns over Nigeria’s debt profile, the government stated that the debt service-to-revenue ratio, which peaked at over 90 percent in 2023, is on a downward trajectory. It attributed this improvement to fiscal reforms, including the cessation of inflationary monetary practices and increased revenue from government enterprises and the Nigerian National Petroleum Corporation (NNPC).
The government reiterated that substantial investment in infrastructure, energy, transportation, and agriculture is crucial to steering the economy toward sustainable and inclusive growth. It stressed that the borrowing plan is guided not merely by the volume of debt but by the expected utility, sustainability, and economic returns of the financed projects.
“All borrowed funds will be channelled toward projects that enhance growth and are closely monitored to ensure efficient utilisation,” the statement noted.
It further stated that the borrowing plan aligns with the provisions of the Fiscal Responsibility Act 2007 and the Debt Management Office (DMO) Act 2003 as a key component of the Medium-Term Expenditure Framework (MTEF).
Reaffirming its commitment to fiscal discipline, transparency, and accountability, the Federal Government assured that ongoing tax reforms and revenue-enhancing measures would bolster financial stability. It called for continued public engagement and legislative oversight in achieving long-term economic resilience and national prosperity.
