Tinubu Clarifies $21.5 Billion Loan Plan: No Immediate Debt Spike, Says FG
The Federal Government of Nigeria has moved to clarify public concerns surrounding President Bola Ahmed Tinubu’s newly proposed $21.5 billion foreign loan, assuring citizens that the loan will not immediately increase Nigeria’s debt burden.
In a statement released on Tuesday by the Director of Information and Public Relations, Mohammed Manga, the Ministry of Finance emphasized that the proposed borrowing is part of a rolling plan, not an automatic debt addition.
“It should be noted that the Borrowing Rolling Plan does not equate to an automatic increase in the nation’s debt burden. Borrowings are split over the period of the projects,” the ministry explained.
President Tinubu officially requested the National Assembly to approve over $21.5 billion in foreign borrowing for the 2025–2026 fiscal period. This includes an additional €2.2 billion (approx. $2.5 billion) and ¥15 billion (about $104 million) alongside $2 billion in local currency-denominated borrowing.
The loans are intended to support critical infrastructure projects across sectors such as power transmission, irrigation, transportation (rail and road), broadband network expansion, and defense modernization.
The proposed loan will benefit multiple states across Nigeria’s geopolitical zones, including Abia, Bauchi, Borno, Gombe, Kaduna, Lagos, Niger, Oyo, Sokoto, and Yobe.
According to the Ministry, these loans will be sourced primarily from international development partners, including:
- World Bank
- African Development Bank (AfDB)
- Islamic Development Bank
- French Development Agency
- China EximBank
- European Investment Bank
- JICA (Japan International Cooperation Agency)
These institutions offer concessional financing with lower interest rates and longer repayment terms compared to commercial lenders. This approach is expected to support Nigeria’s development goals without creating an unsustainable debt load.
President Tinubu is pursuing these loans as part of broader economic reforms aimed at stabilizing Nigeria’s economy, boosting infrastructure, and attracting foreign investment. His administration has already implemented controversial but impactful policies like removing fuel subsidies and floating the naira, actions that have drawn both praise and criticism.
Economic experts, however, remain cautious. Seun Onigbinde, co-founder of BudgIT, questioned the rationale behind increased borrowing at a time when government revenues are reportedly surging.
“We are in an era of sky-high FG revenues, which is meant to cut deficits if properly applied,” Onigbinde posted on X (formerly Twitter). “Unfortunately, we have failed to apply fiscal discipline to the budget, still putting us on the back of borrowing funds. So what are we borrowing for? To fund the budget gap for tricycles and solar street lights?”
Despite growing skepticism, the government insists the borrowing plan is strategic and necessary for long-term economic transformation. The final decision now rests with the National Assembly’s approval.
