Nigeria’s  Federal Government Clarifies $21.5 Billion 2024–2026 External Borrowing Plan, Not Immediate Loan

In a clarification, the Federal Government of Nigeria explained that President Bola Tinubu’s recent communication of a US $21.5 billion request to the National Assembly is not an immediate borrowing demand, but rather the formal submission of the 2024 – 2026 External Borrowing Rolling Plan. The plan lays out a multi-year framework for both federal and state government external loans—highlighting potential sources, project timelines, and repayment structures—without obligating the country to draw the full amount at once.

According to the Federal Ministry of Finance, this structured approach is mandated by the Fiscal Responsibility Act 2007 and the Debt Management Office (DMO) Act 2003, and aligns with the Medium Term Expenditure Framework (MTEF). By clearly delineating borrowing needs over three years, the rolling plan helps avoid unpredictable, ad-hoc loans, ensures better alignment with sector priorities, and enhances debt sustainability.

Below, we unpack the key elements of the 2024 – 2026 External Borrowing Rolling Plan, examine its sectoral priorities, highlight the role of development partners, and explore how the FG aims to maintain debt at sustainable levels while fostering economic growth.

What Is an External Borrowing Rolling Plan?

An External Borrowing Rolling Plan is a forward-looking document—typically spanning three to five years—that outlines a government’s anticipated external financing needs, the specific projects earmarked for funding, and the likely sources (e.g., multilateral agencies, bilateral lenders, and export credit agencies). Unlike a simple loan request, which might ask for a lump-sum disbursement in one fiscal year, a rolling plan:

• Maps Out Timelines: Specifies when funds will be drawn (e.g., H2 2025 vs. H1 2026).
  
• Matches Funding to Project Phases: Ensures multi-year projects (e.g., irrigation schemes, rail corridors) receive disbursements in tranches aligned with construction milestones.
  
• Demonstrates Projected Terms & Conditions: Indicates whether loans are concessional (low-interest, long-tenor) or non-concessional.
  
• Improves Fiscal Planning: By integrating with the Medium Term Expenditure Framework (MTEF), it helps ministries and agencies avoid funding gaps and prevents reliance on short-term overdrafts.
  

Both the Fiscal Responsibility Act 2007 and the DMO Act 2003 mandate that Nigeria adopt such structured borrowing frameworks to enhance transparency, ensure adherence to debt ceilings, and prevent unsustainable ad-hoc loans. The FG’s claim is that submitting a rolling plan to the National Assembly is a precondition for drawing any external financing—it does not itself authorize disbursements.

Breakdown of the 2024 – 2026 Plan

President Tinubu’s May 28, 2025 communication to the National Assembly seeks approval for a US $21.5 billion framework covering:

• Federal Government External Borrowing – Approximately US $16.0 billion over three years.
  
• Sub-National (State) Borrowing – Roughly US $5.5 billion, shared among participating state governments.
  

Within this window, the 2025 allocation for the Federal Government is specifically US $1.23 billion, earmarked for H2 2025 disbursements. That amount remains undrawn as of early June 2025, pending National Assembly ratification and final loan negotiations.

Critical appendices attached to the plan detail:

1. Project Lists: Titles, implementing agencies, total costs, and justification (e.g., “North-South Power Transmission Enhancement,” “Kaduna Irrigation Development,” “Lagos-Kano Fiber Backbone”).
   
2. Loan Modalities: Donor, currency (e.g., euros, yen, yuan, U.S. dollars), interest rates, grace periods, and repayment tenors (typically 15 – 20 years for concessional loans).
   
3. Implementation Schedules: Phased drawings, from project inception (design) to award of contracts (construction) through to commissioning.
   
4. Debt Service Projections: Yearly amortization schedules, ensuring that obligations remain within the DMO’s Debt Sustainability Framework.
   
5. Risk Assessments: Currency-risk analyses, macroeconomic sensitivities (e.g., oil price fluctuations), and mitigation plans (e.g., use of hedging instruments).
   

By laying out these details, the FG seeks to assure legislators and the public that no single project will burden the budget with unmanageable repayments in a given year—loans with multi-year drawdowns and long repayment tails effectively spread out costs.

Key Sectors and Priority Projects

The Rolling Plan emphasizes five critical sectors that underpin Nigeria’s long-term development objectives: power, agriculture, information and communication technology (ICT), security, and transportation infrastructure. Below is a closer look at selected flagship projects slated for external financing.

3.1 Power Grid and Transmission

• North-South Power Transmission Enhancement
  
  • Objective: Reinforce the existing 330 kV and 132 kV corridors connecting generating stations (e.g., Shiroro, Jebba, Afam) to load centers (Lagos, Abuja, Port Harcourt).
    
  • Proposed Funding: Around US $2.5 billion from the African Development Bank (AfDB), World Bank, and Japan International Cooperation Agency (JICA).
    
  • Components:
    
    • Replacement of aging transformers at Ikeja West and Alaoji substations to increase capacity.
      
    • Installation of advanced Supervisory Control and Data Acquisition (SCADA) systems to improve grid monitoring and fault response times.
      
    • Construction of new 330 kV lines linking Kaduna and Yola, reducing bottlenecks in northern Nigeria.
      
• Rural Electrification and Distribution Upgrades
  
  • Goal: Extend the grid to underserved areas—particularly in the North East and South South regions—reducing distribution losses (currently averaging 17%) and improving reliability.
    
  • Funding Sources:
    
    • European Investment Bank (EIB) loan of €300 million for distribution transformer deployment.
      
    • Concessional credit from China EximBank for rural feeder line extensions in states like Borno, Yobe, and Taraba.
      
  • Impact: Expected reduction in outage-related economic losses by 30% in targeted districts, enabling local industries (e.g., agro-processing, small-scale manufacturing) to operate more efficiently.
    

3.2 Agriculture and Food Security

• Northern Nigeria Irrigation Initiative (NNII)
  
  • Rationale: Following the 2022 FAO report that estimated 70% of Nigeria’s cereals are rain-fed—making them highly vulnerable to drought—the NNII seeks to develop sustainable irrigation in the Kano River and Hadejia-Jama’are basins.
    
  • Proposed Loan: US $800 million from the World Bank’s International Development Association (IDA) and US $200 million from the French Development Agency (AFD).
    
  • Components:
    
    • Construction of new tertiary canals serving over 100,000 hectares of farmland in Kano, Jigawa, and Yobe States.
      
    • Rehabilitation of existing water-storage dams (e.g., Tiga, Challawa) to increase year-round water supply.
      
    • Introduction of solar-powered water-pumping stations to reduce reliance on diesel pumps.
      
  • Expected Outcomes:
    
    • Boosted rice and wheat yields by 25–30% within three years of full operation.
      
    • Creation of over 150,000 direct and indirect jobs—from farm labor to agro-processing—helping farmers graduate from subsistence to commercial production.
      
• FADAMA III Enhancement
  
  • Building on the earlier FADAMA II project, which promoted small-scale irrigation, the third phase aims to scale interventions to additional states—particularly Abia, Gombe, and Oyo.
    
  • Funding: US $500 million loan from the African Development Bank and a €50 million grant from European Union (EU).
    
  • Activities:
    
    • Training farmers in climate-smart agriculture practices (e.g., drip irrigation, drought-resistant seeds).
      
    • Establishing agribusiness incubators to nurture small and medium-scale enterprises (SMEs) in processing and marketing.
      
    • Strengthening cooperative societies to improve farmers’ bargaining power and access to credit.
      

3.3 Information and Communication Technology

• National Broadband Plan (NBP) Phase II
  
  • Objective: Expand broadband access from 70% to 90% of the population by 2027, closing the digital divide between urban centers (e.g., Lagos, Abuja) and rural communities.
    
  • Financing:
    
    • US $400 million concessional loan from Japanese International Cooperation Agency (JICA) for fiber-optic backbone expansion.
      
    • €100 million from European Investment Bank (EIB) to provide last-mile connectivity grants to Internet Service Providers (ISPs).
      
  • Components:
    
    • Laying of 10,000 km of underground fiber cable linking all state capitals and major tertiary institutions.
      
    • Establishment of National Data Centers (Tier III standard) in Lagos and Abuja to host government-owned systems (e.g., e-payment platforms, e-health records).
      
    • Subsidies for community access points in underserved areas—equipping public libraries, town halls, and schools with broadband terminals and training staff.
      
• Digital Identification and E-Government Services
  
  • A US $150 million loan from World Bank (IDA) to strengthen the National Identity Management Commission (NIMC) in rolling out biometrically-linked, secure IDs, which feed into tax collection, social welfare distribution, and financial inclusion efforts.
    
  • Upgrade of existing e-Government Infrastructure:
    
    • Deployment of integrated data-sharing platforms among MDAs (ministries, departments, and agencies) to reduce duplication.
      
    • Implementation of blockchain-backed document verification systems to combat fraud in public procurement.
      

3.4 Security and Defense

• Air Force Modernization: Acquisition of Fighter Jets
  
  • Context: The 2024 Security Sector Report highlighted gaps in aerial surveillance and defense readiness—exacerbating challenges posed by insurgencies in the North East (Boko Haram) and banditry in the North West.
    
  • Proposed Loan: US $700 million from China EximBank under a concessional export credit arrangement.
    
  • Scope:
    
    • Procurement of 12 multirole fighter jets (e.g., JF-17 Thunder) equipped for reconnaissance, close air support, and precision strikes.
      
    • Pilot and technical staff training in collaboration with the People’s Liberation Army Air Force (PLAAF).
      
    • Establishment of a maintenance and logistics facility at Nnamdi Azikiwe International Airport, Abuja, to ensure operational readiness and parts supply.
      
  • Anticipated Impact:
    
    • Enhanced air interdiction capabilities against non-state actors, reducing casualty rates in conflict-affected areas by an estimated 20%.
      
    • Improved border surveillance along the Sambisa and Lake Chad fronts, curbing cross-border infiltration and arms smuggling.
      
• Police Force Modernization
  
  • A US $300 million loan facility from the Islamic Development Bank (IsDB) for the Nigeria Police Force (NPF) to upgrade communications networks, procure armored vehicles, and enhance forensic labs.
    
  • Deployment of body-worn cameras in pilot zones (e.g., Lagos mainland), accompanied by digital evidence management systems, to improve accountability and community trust.
    

3.5 Rail and Road Infrastructure

• Lagos-Kano Standard Gauge Rail (SGR) Extension
  
  • Background: The inaugural Abuja-Kaduna SGR (187 km) opened in July 2023, reducing travel time from 4 hours by road to under 2 hours by train. Building on that success, the plan envisions extending the SGR from Kaduna through Kano to Nguru on the Jigawa border.
    
  • Proposed Funding:
    
    • US $1.5 billion from the African Development Bank and World Bank.
      
    • US $500 million from China EximBank for track laying, signaling, and station construction.
      
  • Components:
    
    • Construction of 420 km of new dual-track railway, including bridges over the Niger River near Kontagora.
      
    • Upgrading of existing stations in Kaduna, Zaria, and Kano to handle high-speed trains and passenger amenities (platform extensions, VIP lounges, cargo terminals).
      
    • Implementation of European Train Control System (ETCS) Level 2 signaling for real-time train monitoring and collision avoidance.
      
• East-West Road Corridor Rehabilitation
  
  • Purpose: The all-weather East-West Road (Apapa-Port Harcourt) is a lifeline for freight moving from the Lagos ports to the southeastern oilfields and export terminals. Frequent potholes and seasonal erosion have hampered economic activity.
    
  • Financing:
    
    • €200 million loan from European Investment Bank (EIB) to rehabilitate the 500 km stretch, focusing on improved drainage, asphalt overlays, and safety features (guardrails, signage).
      
    • US $100 million from African Development Bank (AfDB) for constructing new bypasses around congested urban centers (e.g., Onne, Igwuruta).
      
  • Expected Benefits:
    
    • Reduction of travel time from Lagos to Port Harcourt by 20%, cutting logistics costs for the oil and gas sector by an estimated 10%.
      
    • Decreased accident rates by 35% through better pavement conditions and signage.
      

Development Partners and Funding Sources

The 2024 – 2026 Rolling Plan relies heavily on concessional financing from established development partners—institutions that can lend at below-market rates, offer extended grace periods, and provide capacity-building support. Key partners include:

• World Bank Group (IDA and IBRD)
  
  • Focus: Large-scale infrastructure, agriculture, social safety nets, and policy reforms.
    
  • Recent Engagement: The Nigeria Economic Recovery & Growth Program (2023) provided US $750 million in budget support to stabilize macro indicators and support reform commitments.
    
• African Development Bank (AfDB)
  
  • Role: Financing power sector upgrades, transportation corridors, regional trade facilitation.
    
  • Example: The Power Sector Recovery Program (2024) contributed US $500 million to reduce transmission losses and strengthen utility governance.
    
• French Development Agency (AFD)
  
  • Emphasis: Urban transport, water supply, and public service efficiency.
    
  • Project: €150 million for the Lagos Urban Bus Reform which aims to replace 5,000 minibuses with modern buses, reducing emissions and improving commuter safety.
    
• European Investment Bank (EIB)
  
  • Mandate: Climate action, sustainable infrastructure, and SME support.
    
  • Initiative: €100 million for Rural Electrification in Northern Nigeria (2024), supplying solar mini-grids to off-grid communities in Borno, Yobe, and Gombe.
    
• Japan International Cooperation Agency (JICA)
  
  • Specialty: Technical cooperation, human capital development, and infrastructure financing.
    
  • Ongoing Work: The Abuja Rail Mass Transit Phase II study (2023), with ¥10 billion in technical assistance, informed feasibility designs for the Light Rail extension in the federal capital.
    
• China EximBank
  
  • Provision: Export credit lines for equipment procurement, turnkey contracts through Chinese contractors (e.g., CCECC, CRCC).
    
  • Key Projects: Lagos-Kano SGR, Power Transmission Upgrades, and Urban Mass Transit Systems in Lagos and Abuja.
    
• Islamic Development Bank (IsDB)
  
  • Focus: Human development (health, education), as well as infrastructure aligned with Sharia-compliant financing principles.
    
  • Program: US $150 million for Education Sector Support (2024), funding school renovations and teacher training programs in Sokoto and Zamfara States.
    

By tapping into this diverse consortium, Nigeria can secure blended financing—a mix of grants, concessional loans, and technical assistance—mitigating the overall cost of capital and minimizing short-term repayment pressures.

Inclusion of State Governments

A notable feature of the Rolling Plan is its explicit accommodation of State Government external borrowings, a first in Nigeria’s history. Previously, sub-national governments largely relied on Paris Club and Lagos State was the only state formally accessing the bond market. Under the 2024 – 2026 framework:

• Participating States: Abia, Bauchi, Borno, Gombe, Kaduna, Lagos, Niger, Oyo, Sokoto, Yobe (with others poised to join in 2026).
  
• Purposes:
  
  • Abia & Bauchi: Rural road networks to link farmers to markets; water supply system expansions.
    
  • Borno & Yobe: Post-insurgency reconstruction—rehabilitation of schools, hospitals, and internal roads destroyed by Boko Haram.
    
  • Gombe: Urban waste management and landfill rehabilitation project, in partnership with the African Development Bank.
    
  • Kaduna & Lagos: Mass transit buses (Kaduna BRT Phase II; Lagos Bus Rapid Transit expansion).
    
  • Niger & Oyo: Irrigation schemes in the Jebba and Oyo River basins, supporting maize and cassava production.
    
  • Sokoto: Solar mini-grid deployment to electrify off-grid communities scattered across remote local government areas (LGAs).
    

By channeling borrowing approvals through the FG, the plan ensures that state loans are consistent with national debt sustainability thresholds—and that terms are negotiated centrally, leveraging Nigeria’s sovereign creditworthiness to secure lower interest rates than states would achieve independently.

Debt Sustainability and Fiscal Context

6.1 Debt Service-to-Revenue Ratio

Between 2015 and 2022, Nigeria’s external borrowing surged—driven by lower oil prices (2015–2016, 2020) and heavy fiscal deficits—causing the debt service-to-revenue ratio to climb beyond 90% in 2023. This ratio measures the proportion of government revenues used to service debt (principal + interest) and serves as a key indicator of fiscal stress.

According to the Debt Management Office (DMO), the ratio peaked at 92.4% in December 2023, implying that nearly all revenues were absorbed by debt servicing, leaving little for capital expenditure or social programs. By March 2025, following revenue-enhancement measures and the removal of the fuel subsidy, the ratio had declined to 73.8%, reflecting modest improvement. The FG claims that with the disciplined execution of the Rolling Plan—and reliance on concessional financing—the ratio is projected to dip below 65% by end-2026.

“Our debt strategy is guided not by the size of our obligations but by the utility, sustainability, and economic returns of each borrowing,” noted the Ministry of Finance.

6.2 Revenue Mobilization: NNPCL and Technology Solutions

A cornerstone of Nigeria’s effort to stabilize debt dynamics has been improving domestic revenues. Key initiatives include:

• Transition of NNPCL to a Profit-Driven Entity
  
  • In 2023, the Nigerian National Petroleum Company Limited (NNPCL) shifted from a cost-recovery production-sharing model to a revenue-generating corporation. By enhancing transparency in crude lifting auctions and gas commercialization, NNPCL reported a net profit of ₦1.2 trillion in FY 2024—up from ₦350 billion in FY 2022.
    
  • The FG projects ₦1.5 trillion in NNPCL dividends for FY 2025, which will be remitted to the Federation Account, bolstering fiscal space.
    
• Technology-Enabled Tax Collection
  
  • The widespread rollout of the Integrated Payroll & Personnel Information System (IPPIS) across MDAs has curbed ghost workers and unauthorized allowances, saving an estimated ₦120 billion in leakages.
    
  • The Treasury Single Account (TSA), introduced in 2015, was revitalized in 2024 with stricter enforcement—ensuring all government revenues flow through one unified account. This move increased monthly remittances by 25% within a year.
    
  • Implementation of an Integrated Financial Management Information System (IFMIS) across all 36 states and Abuja further streamlined payments, enhanced budget tracking, and flagged unauthorized disbursements in real time.
    
• Collection of Legacy Dues
  
  • The FG has intensified recovery of outstanding loans extended to Government-Owned Enterprises (GOEs), including the Nigeria Electricity Regulatory Commission (NERC) and the Nigerian Ports Authority (NPA), leading to the clawback of ₦150 billion in overdue receivables between January and April 2025.
    

These measures underpin the FG’s assertion that—despite fresh external borrowing—the country’s overall debt burden remains manageable when assessed against broader revenue-mobilization gains.

6.3 Ending “Ways and Means” and Inflation Control

For years, the Central Bank of Nigeria (CBN) relied on “ways and means”—short-term overdrafts to the FG—to plug budget gaps. These advances, often rolled over indefinitely, fueled money supply growth and contributed to inflationary pressures. Recognizing this, the CBN implemented a no-rollover policy in January 2024, forcing the FG to seek alternative financing—primarily external concessional loans.

As a result, Nigeria’s headline inflation peaked at 28.9% in February 2024, but hovered around 21% by May 2025, reflecting gradual moderation. The rolling plan’s emphasis on concessional external borrowing (with minimal monetization by the CBN) underlies the FG’s claim that it has ended distortionary and inflationary “ways and means” financing.

Macroeconomic Stabilization Achievements

In tandem with the rolling plan, the FG has pursued several stabilization measures:

• Fuel Subsidy Removal
  
  • In July 2023, the FG eliminated the universal petrol subsidy, replacing it with a targeted voucher scheme for low-income households and essential sectors (e.g., agriculture, local transport). This saved an estimated ₦3.5 trillion in FY 2023 alone, freeing resources for social welfare and infrastructure.
    
  • While retail petrol prices rose from ₦184/liter to ₦212/liter overnight, the government provided ₦300 billion in emergency support to states, ensuring that transit-dependent communities faced minimal disruption.
    
• Exchange Rate Unification
  
  • From March 2024 to January 2025, Nigeria operated multiple exchange windows (I&E Window, SMIS, SME FX), leading to a divergence between the official rate (₦463/$1) and the parallel market rate (₦575/$1). In January 2025, the CBN unified these into a single managed float regime—reducing arbitrage opportunities and restoring confidence.
    
  • The naira stabilized around ₦550/$1 by May 2025, up from ₦750/$1 in December 2023—reflecting improved foreign inflows (remittances, oil exports) and the lure of higher real interest rates (CBN’s benchmark at 18.5%).
    
• Inflation Management
  
  • As of April 2025, headline inflation was 21.4% (year-on-year), down from 24.5% in December 2024. Core inflation (excluding volatile food items) stood at 17.8%, signaling gradual but uneven easing.
    
  • Monetary policy remains tight: the CBN retains a Cash Reserve Requirement (CRR) of 27.5% for commercial banks, and only recently began modest liquidity injections through Open Market Operations (OMOs) to support SMEs.
    

These combined efforts—budget-financed subsidy cuts, exchange rate rationalization, and prudent monetary stance—have laid the groundwork for the FG to pursue the rolling plan without compromising macroeconomic stability.

Vision for Inclusive Economic Growth

With macro stabilization underway, the FG envisions a shift toward rapid, sustained, and inclusive growth. Key pillars include:

• Diversification from Oil
  
  • In 2024, oil revenues accounted for just 30% of total federal receipts (down from over 50% in 2015) due to production cuts and global price volatility. The FG aims to reduce this share to 20% by 2027 through expansion of non-oil sectors—agriculture, mining, services, and manufacturing.
    
  • The National Automotive Industry Development Plan (NAIDP) (launched 2023) seeks to revive local vehicle assembly plants (e.g., Innoson Vehicle Manufacturing, Peugeot Nigeria) via tariffs, incentives, and access to affordable financing (including from the rolling plan).
    
• Boosting Agriculture and Agro-Processing
  
  • Beyond irrigation, the FG is promoting public-private partnerships (PPPs) for commodities like rice, cassava, and sugar—mirroring success in cassava starch production in Edo State, which now exports to Europe. The rolling plan’s irrigation investments dovetail with an expanded Anchor Borrowers’ Programme (ABP), providing credit access to 750,000 smallholder farmers.
    
• Fostering Digital Economy and Innovation
  
  • In the National Digital Economy Policy and Strategy (2020–2030), the FG targets a $13 billion digital sector by 2025. Rolling plan funding for broadband expansion and e-Government platforms supports fintech growth—enabling mobile money transactions that now constitute 25% of total payments volume (2024).
    
• Encouraging Private Sector Participation
  
  • Through the Nigeria Infrastructure Fund (NIF), which aggregates pension-fund commitments, the FG is matchmaking with infrastructure PPPs—particularly in toll roads, airports (e.g., Lagos International Cargo Airport), and seaports (e.g., Lekki Deep Sea Port). The rolling plan’s complementary investments (e.g., feeder roads) enhance the viability of such projects.
    

By aligning rolling plan borrowings with broader industrial and digital strategies, the FG aims to generate 3.5–4% real GDP growth annually from 2026 onward—compared to 2.7% recorded in Q1 2025—and create an additional 4 million jobs per year in agriculture, manufacturing, and services.

Borrowing Strategy, Governance, and Oversight

Ensuring that borrowing remains both sustainable and high-impact requires robust governance mechanisms:

• DMO’s Debt Sustainability Framework
  
  • The Debt Sustainability Framework (DSF) establishes thresholds for debt-to-GDP, debt service-to-revenue, and external vulnerabilities. Under the DSF, external debt is deemed sustainable if debt-to-GDP remains below 55% and debt service-to-revenue stays under 45%. Nigeria’s current debt-to-GDP is 51% (March 2025), giving some headroom, but the FG aims to avoid breaching these limits.
    
• Parliamentary Oversight
  
  • The Appropriations Committee and the Public Accounts Committee of the National Assembly will scrutinize each loan’s terms—interest rates, grace periods, and conditionalities—to ensure value for money. Loan agreements will be tabled publicly within 30 days of signature, per the Fiscal Responsibility Act.
    
• Project Monitoring Units (PMUs)
  
  • Each supervising ministry (e.g., Power, Agriculture, Works) is required to establish a PMU that tracks disbursements, procurement processes, environmental and social safeguards, and quarterly technical audits. For large projects (e.g., Abuja-Kaduna SGR), independent engineering firms—such as RITES Ltd. (India) or Crimson & Caxton (Nigeria)—will conduct mid-term performance evaluations.
    
• Transparency Portals
  
  • The DMO Debt Portal publishes real-time data on loan draws, outstanding balances, and upcoming maturities. The FG’s Budget Office maintains a complementary portal detailing budget provisions for debt service, principal repayments, and project expenditures—accessible to citizens for accountability.
    

Through these layers of oversight, the FG hopes to minimize misallocation and ensure that funds flow to projects that directly enhance productivity and living standards.

Concerns, Risks, and Public Sentiment

Despite the FG’s assurances, several concerns and risks linger:

• Perceived Debt Accumulation
  
  • Civil society groups, including the Civil Society Legislative Advocacy Centre (CISLAC), warn that while structured, a US $21.5 billion plan still signals significant future obligations. “Loans, even if drawn later, will eventually need servicing, affecting future budgets for health and education,” noted CISLAC’s Director, Joe Ajaero, at a May 2025 town hall in Lagos.
    
• Project Selection and Execution Risks
  
  • Historical experiences—such as uncompleted road segments in the East-West Road (2013 – 2017) and stalled irrigation projects in Borno—underscore challenges in procurement, community engagement, and capacity constraints. Critics stress the importance of rigorous feasibility studies and transparent contract awards.
    
• Exchange Rate Volatility
  
  • Concessional loans often require counterpart funding in naira. If the naira depreciates beyond projections (e.g., from ₦550/$1 to ₦650/$1), local currency costs could balloon, raising concerns among state governments (which depend on monthly federal allocations for counterpart funding).
    
• Opportunity Cost of Debt
  
  • When citizens see fighter jets and luxury highways financed, questions arise about priorities—especially as healthcare facilities in states like Kogi and Ebonyi remain under-resourced. Patient advocates urge the FG to allocate more to Primary Health Care Development Agencies (PHCDAs) and community-based health insurance reforms.
    

Despite these reservations, some stakeholders remain optimistic. In a focus group of small business owners in Abuja (May 2025), participants acknowledged the dire need for reliable power and roads to keep their enterprises competitive. “If rolling plan funds fix Nigeria’s transmission lines and ease commute, we’re willing to back it—provided it’s not a debt trap,” said Chinyere Okafor, owner of a digital printing press in Wuse II.

Next Steps and Legislative Timeline

1. Submission to National Assembly
   
   • President Tinubu’s letter (May 28 2025) formally transmitted the Rolling Plan to both chambers. By constitutional mandate, the House of Representatives and Senate have 60 days to deliberate and approve (or amend) before the window lapses.
     
2. Committee Hearings
   
   • The Joint Borrowing & Debt Management Committee—comprising members from Appropriations, Finance, and Works—will hold public hearings in June 2025, inviting FG officials, DMO representatives, project champions (e.g., ministry technical directors), and civil society.
     
3. Passage of Appropriation Components
   
   • Once approved, specific 2025 external financing allocations (e.g., the US $1.23 billion planned for H2 2025) will be inserted into the 2025 Appropriation Act, allowing the Debt Management Office to finalize negotiations and request disbursements from respective lenders.
     
4. Disbursement Phases
   
   • Following loan effectiveness (signing of agreements, satisfaction of conditions precedent), project disbursements are staggered across H2 2025 and H1 2026, aligning with budget releases and procurement cycles.
     
5. Monitoring and Mid‐Term Reviews
   
   • By December 2025, the DMO will publish a Mid-Year Debt Report, detailing amounts drawn, undisbursed balances, and preliminary project progress. A comprehensive Annual Debt Sustainability Analysis (DSA) will follow in Q2 2026, informing refinements for the 2027 – 2029 rolling plan.
     

By adhering to this roadmap, the FG seeks to maintain fiscal discipline, ensure that borrowing translates into productive assets, and keep public stakeholders informed.

Conclusion

The US $21.5 billion 2024 – 2026 External Borrowing Rolling Plan represents a comprehensive blueprint for Nigeria’s external financing strategy—spanning power, agriculture, ICT, security, and transportation, and involving both federal and state governments. Far from an immediate debt liability, the plan simply lays out what could be borrowed, when, and for which projects.

By aligning this framework with the MTEF and the requirements of the Fiscal Responsibility Act 2007 and DMO Act 2003, the FG aims to bolster transparency, improve project execution, and avoid the pitfalls of last-minute, high-cost borrowing. Concessional financing from partners—such as the World Bank, AfDB, AFD, EIB, JICA, China EximBank, and IsDB—will help secure favorable terms and spread repayment over many years.

At the same time, the FG’s emphasis on reducing the debt service-to-revenue ratio (which peaked above 90% in 2023) reflects a commitment to macroeconomic stability. Strengthened revenue streams—from NNPCL dividends to enhanced tax collection via IPPIS, TSA, and IFMIS—provide a foundation for sustainable borrowing.

Nevertheless, execution risks and public skepticism cannot be ignored. To win citizen confidence, the FG must ensure rigorous project selection, transparent procurement, and timely disbursements. As Nigeria looks to accelerate growth—targeting 3.5–4% real GDP expansion, create 4 million new jobs annually, and diversify away from oil—the rolling plan’s success hinges on turning ambitious blueprints into tangible roads, power lines, irrigation schemes, and digital networks.

If implemented faithfully, the 2024 – 2026 borrowing framework could be a pivotal turning point: occupying the path from mere stabilization toward a prosperous, inclusive economy—one where reliable electricity powers homes, irrigated farms feed millions, broadband connects rural schools, and efficient railroads bind the nation together. The National Assembly’s deliberations in June 2025 will thus not only decide loan approvals, but shape Nigeria’s development trajectory for years to come.

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Photo source: Google

By: Montel Kamau

Serrari Financial Analyst

3rd June, 2025