The Federal Government has come out to defend its proposed $24 billion borrowing plan, saying it will not automatically increase the country’s debt burden or worsen its financial position.
This clarification came on Wednesday from Mohammed Manga, Director of Information and Public Relations at the Federal Ministry of Finance, in response to growing public concerns over Nigeria’s rising debt profile.
According to Manga, the borrowing plan is part of a Medium-Term Rolling Plan (2024–2026), and most of the loans are project-tied. He explained that the loans will not be taken all at once but will be disbursed over multiple years — typically over five to seven years, depending on each project.
The projects covered under the plan span critical sectors such as:
Power transmission lines and grids
Irrigation for agriculture and food security
National fibre optics for digital connectivity
Military fighter jets and equipment for security
Railway and road infrastructure
The Federal Government noted that most of the financing will come from international development partners that offer concessional loans with favourable interest rates and long repayment periods. These include:
The World Bank
African Development Bank (AfDB)
French Development Agency (AFD)
European Investment Bank (EIB)
Japan International Cooperation Agency (JICA)
China EximBank
Islamic Development Bank (IsDB)
The borrowing plan also includes support for various state governments across the country, including Abia, Bauchi, Borno, Gombe, Kaduna, Lagos, Niger, Oyo, Sokoto, and Yobe States, ensuring equitable development across Nigeria’s geopolitical zones.
Manga clarified that the borrowing plan is not the same as actual borrowing. He said the actual loan drawdowns are included in the yearly national budget, and for 2025, the external borrowing component is pegged at $1.23 billion, which is expected to be accessed in the second half of the year.
Debt Strategy, Not Just Debt Size
The government acknowledged concerns about Nigeria’s debt load but said the debt service-to-revenue ratio, which was over 90% in 2023, is now declining due to better economic management and revenue reforms.
The statement emphasised that borrowing is being guided not by the sheer amount of debt, but by the economic returns of each loan, the sustainability of repayments, and the strategic importance of the financed projects.
“Our debt strategy is guided not solely by the size of our obligations, but by the utility, sustainability, and economic returns of the borrowing,” the ministry stated.
The government added that it has stopped borrowing from the Central Bank’s Ways and Means, which it described as distortionary and inflationary, and is now focusing on improving revenue collection.
Expected revenue boosts are anticipated from:
The Nigerian National Petroleum Company (NNPC)
Government-Owned Enterprises (GOEs)
Ministries, Departments and Agencies (MDAs)
Collection of legacy dues using technology-enabled monitoring
Economic Growth Remains Priority
The Federal Government insists that the loan is vital for achieving sustained and inclusive economic growth through investment in energy, transportation, agriculture, and infrastructure.
These investments, it noted, will lay the foundation for economic diversification, attract private sector investment, and boost national productivity.
It also reassured Nigerians that all borrowing remains within sustainable limits under the Debt Management Office (DMO) Debt Sustainability Framework, in compliance with the Fiscal Responsibility Act 2007 and the DMO Act 2003.
The ministry concluded by stating that the government remains committed to fiscal discipline, transparency, and accountability, and values both legislative oversight and public engagement as essential tools in building long-term economic stability.
