The federal government has clarified that the external borrowing component of the 2025 budget, valued at $1.23 billion, has not yet been accessed and is scheduled for disbursement in the second half of the year.
The Federal Ministry of Finance disclosed this position in a statement on Wednesday. This is in response to the formal request submitted by President Bola Ahmed Tinubu to the National Assembly on May 27, 2025, seeking approval for the 2024–2026 External Borrowing Rolling Plan.
According to the ministry, the Borrowing Rolling Plan should not be confused with actual borrowing for any given year.
It further explained that the rolling plan encompasses borrowing needs for both federal and state governments, covering several geopolitical zones. States expected to benefit from the plan include Abia, Bauchi, Borno, Gombe, Kaduna, Lagos, Niger, Oyo, Sokoto, and Yobe.
The finance ministry stressed that including projects in the borrowing plan does not imply an immediate or automatic increase in the nation’s debt burden. Given the rolling plan’s structure, funding is drawn in phases depending on project timelines.
Many of the projects captured in the 2024–2026 plan have financing arrangements spread over five to seven years and are specifically tied to projects in strategic sectors. These include investments in 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 infrastructure 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.
The rolling borrowing plan is an integral part of the country’s Medium-Term Expenditure Framework (MTEF) and is structured in line with both the Fiscal Responsibility Act of 2007 and the Debt Management Office (DMO) Establishment Act of 2003.
It serves as the medium-term external borrowing guide for the federal government as well as participating state governments, outlining the terms and implementation timelines of associated projects in five comprehensive appendices.
Through this structured approach, the government aims to maintain fiscal discipline while ensuring adequate investment in critical sectors. 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 percent in 2023, is already on a downward trend. This improvement follows major fiscal reforms, including the discontinuation of inflationary ways and means financing from the Central Bank of Nigeria (CBN).
The government expects significant revenue growth from the Nigerian National Petroleum Company Limited (NNPC), 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. 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 statement said.
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 also 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.