The Senate has approved President Bola Tinubu's external borrowing plan, totaling over $21 billion for the 2025-2026 fiscal cycle.
The approved borrowing package includes $21.19 billion in direct foreign loans, €4 billion, ¥15 billion, and a $65 million grant. Additionally, the Senate endorsed a domestic bond issuance of approximately N757 billion to settle outstanding liabilities under the Contributory Pension Scheme.
The substantial funds are earmarked for critical sectors across the country, including power, transport, health, education, water, and agriculture, according to the government. A notable allocation within the plan is $3 billion specifically designated for the revitalization of the Eastern Rail Corridor, a vital transportation artery stretching from Port Harcourt to Maiduguri.
Nigeria has historically faced significant challenges in funding its development projects, often relying on foreign loans to bridge funding gaps. The nation's infrastructure, from roads to power grids, has long suffered from underinvestment, impacting economic growth and quality of life. The Tinubu administration has consistently emphasized the need for substantial investment to stimulate development and create jobs.
Senator Adetokunbo Abiru, speaking on the nature of the approved loans on Tuesday, assured the public that they are largely concessional. He highlighted that the loans come with low-interest rates and long repayment terms, with some tenors extending from 20 to 35 years. Abiru emphasized that the funds are "strictly tied to capital and human development projects," ensuring adherence to the nation's Fiscal Responsibility Act and Debt Management Act.
This latest approval follows previous borrowing requests under the current administration, signaling a continued reliance on external financing to drive key national projects and fulfill financial obligations. The government maintains that these loans are strategic investments crucial for unlocking Nigeria's economic potential and improving the welfare of its citizens.
