The Federal Government yesterday defended its proposed $24 billion borrowing plan, asserting that the substantial loan does not equate to an automatic increase in the nation’s debt burden. The government emphasized that the strategic nature of the rolling plan ensures borrowings are staggered across multiple years and tied directly to specific projects.
In a statement defending the plans, the Director of Information and Public Relations of the Federal Ministry of Finance, Mohammed Manga, explained that most projects in the 2024–2026 rolling plan have multi-year drawdowns stretching between five and seven years. These are described as project-tied loans, ensuring funds are disbursed as needed for project implementation.
According to Manga, the projects span critical sectors of the economy, including power grids and transmission lines, irrigation for improving food security, fibre optics network across the country, fighter jets for national security, and vital rail and road infrastructure.
Manga added that the majority of the proposed borrowing will be sourced from Nigeria’s reputable development partners. These include the World Bank, African Development Bank, French Development Agency, European Investment Bank, JICA, China Eximbank, and the Islamic Development Bank.
The government hinted that these institutions offer concessional financing with highly favourable terms and long repayment periods, thereby supporting Nigeria’s development objectives sustainably.
It was also noted that the comprehensive borrowing plan is designed for both the Federal Government and several state governments across numerous geopolitical zones, including Abia, Bauchi, Borno, Gombe, Kaduna, Lagos, Niger, Oyo, Sokoto, and Yobe States.
Defending the country’s rising debt profile, the government reiterated that the debt service to revenue ratio has already started decreasing from its peak of over 90 per cent in 2023.
It stated that the government has ended “the distortionary and inflationary ways and means” (CBN overdrafts to government) and anticipates significant revenue expectations from the Nigerian National Petroleum Company (NNPC) Limited, alongside technology-enabled monitoring and collection of surpluses from Government-Owned Enterprises (GOEs) and revenue-generating ministries, departments, and agencies, including legacy outstanding dues.
The government stated that having achieved a fair degree of macroeconomic stabilization, its overarching goal is to pivot the economy onto a path of rapid, sustained, and inclusive economic growth.
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It maintained that achieving this vision requires substantial investment in critical sectors such as transportation, energy, infrastructure, and agriculture.
“These investments will lay the groundwork for long-term economic diversification and encourage private sector participation. Our debt strategy is therefore guided not solely by the size of our obligations, but by the utility, sustainability, and economic returns of the borrowing. Ensuring that all borrowed funds are efficiently utilised and directed toward growth-enhancing projects remains a top priority,” the statement added.
The statement stressed the government’s commitment to keeping borrowing within manageable and sustainable limits under the Debt Management Office (DMO) Debt Sustainability Framework. It further explained that the ongoing tax reform agenda and other revenue initiatives will further improve revenue generation and prudent financial management.
“We reaffirm our dedication to fiscal discipline, transparency, and accountability. Constructive public engagement and legislative oversight are vital components of our journey toward long-term economic stability and inclusive national prosperity,” it concluded. The government stressed that the proposed Borrowing Rolling Plan is an essential component of the Medium-Term Expenditure Framework (MTEF) under both the Fiscal Responsibility Act 2007 and the DMO Act 2003.