The Federal Government has clarified that the communication of $ 21.5 billion on Tuesday by President Bola Tinubu to the National Assembly was a formal request for consideration and approval of the External Loan Rolling Plan 2024–2026, which includes state governments.
He explained that a loan plan does not rise to take a loan of $ 21.5 billion, but only shows a plan of what can be borrowed and where loans will come for specific projects that are important for federal and state governments, including what the federal government will take in 2025.
In addition, the Federal Government said that the proposed loan rolling plan is an essential component of the medium -term expenses framework (MTEF), in accordance with the 2007 Fiscal Responsibility Law and the Law of the Debt Management Office (DMO) of 2003.
According to the Government, the Plan describes the external loan framework for federal and subnational governments for a period of three years, accompanied by five detailed appendices in the projects, terms and conditions, implementation period, etc.
In a statement on Wednesday, Mohammed Manga, director, information and public relations in the Federal Ministry of Finance, according to the adoption of a structured approach and with a vision of the future, the plan facilitates comprehensive financial planning and avoids the inefficiencies of ad hoc or reagent loans practices.
“This strategic method improves Nigeria's ability to implement effective fiscal policies and mobilize development resources. The loan plan does not amount to real loans for the period. The real loan for each year is contained in the annual budget.
“In 2025, the external loan component is US $ 1.23 billion, and has not yet been drawn. This is planned for H2 2025.
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“In addition, the plan is for federal governments and several states in numerous geopolitical areas, including Abia, Bauchi, Borno, Gombe, Kaduna, Lagos, Niger, Oyo, Sokoto and Yobe.
“It is important to note that it should be taken into account that the loan bearing plan does not equals an automatic increase in the burden of the nation's debt. The nature of the rolling plan means that loans are divided during the project period.
“For example, a large proportion of projects in the 2024-2026 rolling plan have several years between 5 and 7 years, which are loans tied to projects. These projects cross the critical sectors of the economy, including electrical networks and transmission lines, irrigation to improve food safety, the fiber optic network throughout the country, combat jets for security and railway road infracture, “Stated.
He informed that most of the proposed loans will be obtained from the development partners of Nigeria, including the World Bank, the African Development Bank, the French Development Agency, the European Investment Bank, Jica, China Eximbank and the Islamic Development Bank, since these institutions offer financing of the concession with favorable terms and long periods of payment, which support the development objectives of Nigeria in a way sustainable.
The Government reiterated that the debt income service index has begun to decrease since its peak of more than 90 percent in 2023, and has finished distorting and inflationary forms and means.
He stressed that there are significant income expectations of the Nigerian National Petroleum Company Limited (NNPCL), and the monitoring and collection of surpluses with surpluses of the technology of government -owned companies (GOE) and the ministries, departments and agencies owned by the income, including outstanding legacy quotas.
“Having achieved a good degree of macroeconomic stabilization, the general objective of the federal government is to turn the economy on a quick, sustained and inclusive economic growth path.
“Achieving this vision requires a substantial investment in critical sectors such as transport, energy, infrastructure and agriculture. These investments will lay the basis for long -term economic diversification and encourage the participation of the private sector.
“Therefore, our debt strategy is guided not only by the size of our obligations, but by the utility, sustainability and economic yields of loans. Ensure that all funds provided are used efficiently and aimed at projects that improve growth remain a maximum priority,” the government explained.
Manga stressed that the Government remains committed to borrowed within the manageable and sustainable limits in accordance with the DMO debt sustainability framework.