President Bola Ahmed Tinubu has put forward a substantial external borrowing plan totaling $24.14 billion, seeking approval from the National Assembly as part of Nigeria's 2024-2026 financial strategy.
This move comes as the country's public debt, which stood at N144.67 trillion at the end of 2024, is expected to increase to over N182.91 trillion by 2026.
The proposed loans comprise $21.54 billion, €2.19 billion, and ¥15 billion, translating to approximately N38.24 trillion when converted at the current exchange rates.
The borrowing initiative is part of a broader strategy to support key sectors, including infrastructure, agriculture, healthcare, and more, according to President Tinubu’s letter to the House of Representatives.
Despite concerns about rising debt levels, the Federal Ministry of Finance emphasized in a press release that this borrowing plan is a strategic component of the Medium-Term Expenditure Framework.
The plan aims to facilitate comprehensive financial planning and avoid inefficient ad hoc borrowing practices.
"The borrowing plan does not equate to actual borrowing for the period. The actual borrowing for each year is contained in the annual budget," the ministry stated, clarifying that the 2025 component of $1.23 billion is planned for the second half of the year.
The loans are expected to be sourced from development partners, such as the World Bank and the African Development Bank, which offer concessional financing with favorable terms.
These funds will be directed toward multi-year, project-specific loans in sectors such as energy, transportation, and digital infrastructure, the finance ministry explained.
In addition to the borrowing plan, President Tinubu has proposed a $2 billion foreign currency-denominated bond program to be issued in Nigeria’s domestic market, aimed at deepening the financial market and stabilizing the exchange rate.
While the borrowing plan focuses on growth-enhancing projects, the government remains committed to fiscal discipline and transparency.
The Ministry of Finance highlighted ongoing efforts to reduce the debt service-to-revenue ratio, which peaked at over 90% in 2023, and improve revenue through reforms and technology-enabled monitoring.
