The Federal Government on Wednesday defended its proposed $24 billion borrowing plan, insisting that it does not automatically translate into an increase in the nation’s debt burden.
In a statement released by the Director of Information and Public Relations at the Federal Ministry of Finance, Mohammed Manga, the government explained that the borrowing is structured under a multi-year rolling plan from 2024 to 2026, with drawdowns tied to specific projects.
According to Manga, the loans will be disbursed over a period of five to seven years and are dedicated to critical infrastructure and development projects. These include investments in electricity transmission and power grids, irrigation systems to enhance food security, nationwide fibre optic networks, procurement of fighter jets for security, and extensive road and rail projects.
He clarified that the bulk of the proposed funds will be sourced from Nigeria’s international 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 Exim Bank, and the Islamic Development Bank. The government emphasized that these partners offer concessional loans with favourable interest rates and long repayment terms, aligning with Nigeria’s sustainable development goals.
Manga further explained that the borrowing plan encompasses both federal projects and initiatives undertaken by state governments across various geopolitical zones. States involved in the borrowing arrangement include Abia, Bauchi, Borno, Gombe, Kaduna, Lagos, Niger, Oyo, Sokoto, and Yobe.
“The borrowing plan does not imply immediate or full-scale borrowing within the three-year period,” he noted. “Actual borrowings are determined annually within the context of the federal budget. For instance, in 2025, the external borrowing component is projected at $1.23 billion, which is expected to be drawn in the second half of the year.”
Responding to concerns about Nigeria’s rising debt profile, the government reiterated that the debt service-to-revenue ratio has started to decline, following a peak of over 90 percent in 2023.
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