The borrowing plan submitted by President Bola Ahmed Tinubu to the National Assembly represents a proposal and consists of projected borrowings by the federal and state governments over the next two years.
The Presidency and the Ministry of Finance yesterday clarified that it is an all-inclusive national plan that comprises proposed loans by several states across the various geopolitical zones and the loan component of the Federal Government’s expenditure plan.
The clarification came against the misconception that the Federal Government intends to borrow under the current fiscal year.
President Tinubu on Tuesday sought approval from the National Assembly for the 2025–2026 External Borrowing Rolling Plan, totalling some $20 billion.
In three separate letters, the President sought approval for the borrowing of $2 billion for capital grazing funds, $21,543,647,912; 2,193,856,324.50 Euro, 15 billion Japanese yen, a grant of 65 million Euro and N757,983,246,571.
The Ministry of Finance explained that the rolling borrowing plan should not be confused with actual borrowing for any given year.
According to the ministry, the actual borrowing for each year is contained in the annual budget.
It said the external borrowing component of the 2025 budget, valued at $1.23 billion, is yet to be accessed.
The ministry explained that the rolling plan encompasses borrowing needs for the Federal Government and several state governments across geopolitical zones, including Abia, Bauchi, Borno, Gombe, Kaduna, Lagos, Niger, Oyo, Sokoto, and Yobe.
The ministry noted that the inclusion of projects in the borrowing plan does not imply an immediate or automatic increase in the nation’s debt burden, pointing out that, given the structure of the rolling plan, funding is drawn in phases depending on project timelines.
According to the government, many of the projects captured in the plan have financing arrangements spread over five to seven years and are specifically tied to projects in strategic sectors.
These strategic investments include national power grids and transmission lines, irrigation schemes to bolster food security, a nationwide fibre optic backbone, the acquisition of fighter jets to improve national security, and major rail and road projects.
A majority of the financing for these initiatives will be sourced from Nigeria’s development partners.
These include the World Bank, African Development Bank (AfDB), French Development Agency (AFD), European Investment Bank (EIB), Japan International Cooperation Agency (JICA), China EximBank, and the Islamic Development Bank (IsDB).
These institutions offer concessional loans with favourable terms and long repayment tenures, providing a relatively low-cost way for Nigeria to fund its development goals.
Special Assistant to the President on Social Media, Dada Olusegun, added that the document transmitted to the National Assembly outlines a comprehensive framework that spans a two-year period between 2025 and 2026, covering both federal and state governments’ external financing plans.
He said: “Periodically, nations come up with expenditure frameworks to guide how budgets will be executed over time.
“For the latest development, Nigeria’s MTEF covers a period of two calendar years: 2025–2026.”
According to him, the request by the President included details on how Nigeria, through the Federal Government and the 36 state governments, plans to access external funding for various development projects.
He noted that for the Federal Government, one of the core proposals is the raising of $2 billion from the domestic market targeted at infrastructure investments, the first of its kind among several other initiatives aimed at bridging the country’s infrastructural gap.
He also clarified the constitutional and procedural context of the financing plan, stressing that state governments are not permitted to seek international funding without federal backing.
“States cannot access international funding without the Federal Government as a guarantor, and as such, the Senate must approve all forms of external borrowing through the federal government,” Olusegun said.
He explained that in order to streamline the legislative process and avoid repeated borrowing requests, the government opted to present all projected external borrowing needs, federal and state, within a single framework.
He said: “It reeks of absolute lack of plan to keep going back to the Senate every month to get approval for external borrowings.
“As such, all planned borrowings—covering all 36 states and the federal government—over the next two years, have been presented as one to the National Assembly.”
He pointed out that approval by the National Assembly does also not equate to automatic disbursement or utilisation of the entire sum.
According to him, while it is still subject to approval, it also does not mean all such approvals by the National Assembly will be fully utilised by the various levels of government.
The Ministry of Finance explained further that the rolling borrowing plan is an integral part of the country’s Medium-Term Expenditure Framework (MTEF) structured in line with both the Fiscal Responsibility Act of 2007 and the Debt Management Office (DMO) Establishment Act of 2003.
It noted that the plan serves as the medium-term external borrowing guide, outlining the terms and implementation timelines of associated projects in five comprehensive appendices.
According to the ministry, through this structured approach, the government aims to maintain fiscal discipline while ensuring adequate investment in critical sectors.
It said the rolling plan also enables forward financial planning and prevents the inefficiencies and unpredictability of emergency or reactive borrowing practices.
On the issue of Nigeria’s debt sustainability, the Ministry of Finance noted that the debt service-to-revenue ratio, which exceeded 90 per cent in 2023, is already on a downward trend.
This improvement, it said, followed major fiscal reforms, including the discontinuation of inflationary ways and means financing from the Central Bank of Nigeria (CBN).
The government stated that it expected significant revenue growth from the Nigerian National Petroleum Company Limited (NNPCL), alongside increased remittances from government-owned enterprises (GOEs) and key revenue-generating ministries, departments, and agencies (MDAs), aided by technology-driven monitoring and enforcement mechanisms.
Also, legacy debts owed to the federal purse are also being recovered as part of the revenue enhancement drive.
With macroeconomic conditions showing signs of stabilisation, the Federal Government said it is now focused on moving the economy towards a trajectory of accelerated and inclusive growth.
Achieving this objective, it explained, requires sustained capital investment in transportation, energy, infrastructure, agriculture, and other priority sectors of the economy.
The ministry stated that the overarching goal is not to borrow indiscriminately but to ensure that loans are directed at projects with clear economic value and measurable impact.
“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 ministry stated.
The government reiterated its commitment to responsible borrowing, stating that all external loans will remain within the manageable thresholds outlined in the DMO’s Debt Sustainability Framework.
In addition, the ministry said that Nigeria’s ongoing tax reform agenda and related revenue mobilisation initiatives will further strengthen public finances, reduce dependency on debt, and promote financial prudence.
The Federal Government reaffirmed its commitment to fiscal discipline, openness in financial transactions, and responsiveness to public concerns.
It called for continued public engagement and strong legislative oversight as essential components of Nigeria’s long-term path to economic stability and national prosperity.
Olusegun reiterated that loans, when used judiciously, remain a vital tool for financing public development efforts.
“Loans in themselves are not bad instruments of financing public services.
“What Nigerians must focus on is how such loans are being utilised by the government. These are the questions that should be asked,” Olusegun said.
He reaffirmed President Tinubu’s commitment to his electoral promises and developmental agenda, stressing that the administration will not shy away from difficult but necessary decisions.
