$24B Loan: FG Defends Borrowing Plan, Lists Abia, Other States as Beneficiaries | #NwokeukwuMascot

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The Federal Government has justified its proposed $24 billion external borrowing plan, asserting that the loan does not imply an immediate or unsustainable increase in the country’s debt burden.



In a statement issued on Tuesday, the Director of Information and Public Relations at the Federal Ministry of Finance, Mohammed Manga, clarified that the loan will be disbursed in phases across multiple years, in line with the 2024–2026 borrowing plan. He stressed that the plan is structured around project-tied loans with multi-year drawdowns spanning between five to seven years.




According to the ministry, the projects earmarked for the borrowing initiative cut across critical sectors such as energy infrastructure, food security through expanded irrigation, national fibre optics deployment, security enhancement via fighter jets, and extensive investment in both road and rail networks.



Manga emphasized that the bulk of the financing will come from Nigeria’s development partners, including 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. These institutions are expected to provide concessional loans with favourable terms and extended repayment windows.



The government further explained that the borrowing plan spans federal and sub-national levels, involving several states across the six geopolitical zones. States listed as beneficiaries include Abia, Bauchi, Borno, Gombe, Kaduna, Lagos, Niger, Oyo, Sokoto, and Yobe.



Manga noted, “The borrowing plan does not equate to actual borrowing for the entire period. Each year’s borrowing is defined in the annual budget. For instance, the external borrowing component for 2025 is $1.23 billion, and it is scheduled for drawdown in the second half of the year.”



Addressing concerns over Nigeria’s rising debt profile, the government pointed out that the debt service-to-revenue ratio—previously above 90% in 2023—has begun to decline, signalling improving fiscal health.



The ministry attributed this positive shift to recent economic reforms, which include curbing the inflationary practice of ways and means advances, as well as increased revenue expectations from the Nigerian National Petroleum Company (NNPC). It also cited the adoption of technology-driven monitoring systems and the enforcement of remittances from revenue-generating ministries, departments, and agencies (MDAs).



Reaffirming its commitment to macroeconomic stability and inclusive growth, the government maintained that the proposed investments are essential to drive long-term economic diversification and enhance private sector participation.



“Our debt strategy is informed not merely by the size of the obligations, but by their economic utility, sustainability, and projected returns. Every borrowed dollar must be efficiently deployed toward growth-enhancing, productivity-boosting projects,” the statement read.



The government also underscored its adherence to the Debt Management Office’s (DMO) Debt Sustainability Framework and assured that ongoing tax reforms and revenue initiatives would bolster fiscal prudence and financial transparency.



“We remain committed to fiscal discipline, transparency, and accountability. Constructive public engagement and legislative oversight are critical pillars in our collective journey toward economic stability and national prosperity,” the statement concluded.



The borrowing plan, the government said, is a strategic component of the Medium-Term Expenditure Framework (MTEF) and complies fully with the Fiscal Responsibility Act 2007 and the DMO Act 2003.




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