Comprehensive External Borrowing Plan Approved
The House of Representatives recently approved a comprehensive external borrowing plan for the 2025–2026 fiscal period, totaling N37.302 trillion. This initiative is part of the 2025–2026 External Borrowing (Rolling) Plan and includes significant amounts in various currencies. The total funding comprises $21.89 billion, €2.19 billion, JPY15 million, and €65 million in grants. At current exchange rates, this translates to approximately N37.301 trillion.
The breakdown of the borrowing plan shows that at the official exchange rate of N1,519.12 per dollar, the $21.89 billion component equates to N33.25 trillion. The €2.19 billion at N1,791.73 per euro totals N3.93 trillion. Additionally, JPY15 million converts to N155.8 million at N10.39 per Japanese Yen, while the €65 million grant is valued at N116.46 billion.
Under the plan, the Federal Government will access $15.63 billion, €1.72 billion, and JPY15 million. An additional $2.73 billion will be allocated for joint federal and state projects, with $606.7 million and €120 million designated for cluster state initiatives. Individual states are expected to receive $2.92 billion and €350 million respectively.
The House also approved N757.98 billion to be raised through the issuance of Federal Government Bonds in the domestic debt market. Furthermore, it authorized the raising of up to $2 billion in foreign currency-denominated instruments via the Domestic Debt Market. This move aligns with the Presidential Executive Order No. 16 of 2023 on Foreign Currency Denominated Financial Instrument Local Issuance Programme.
These approvals followed the adoption of three reports presented by Hon. Abubakar Nalaraba, Chairman of the House Committee on Aids, Loans, and Debt Management, during consideration in the Committee of Supply.
Adjustments to the Lagos-Calabar Coastal Highway Project
In the case of the Lagos-Calabar Coastal Highway, lawmakers approved an upward revision of the total loan size for Section 1 of Phase 1 from $700 million to $747 million. Nalaraba explained that while the initial submission was based on $700 million in financing commitments, an additional $47 million was later secured through Export Credit Agencies, necessitating the adjustment.
The Committee also noted the inadvertent exclusion of the $300 million Nigeria Universal Communications Access Project from the borrowing plan. This project aims to deploy 7,000 telecom towers across underserved communities and is crucial to the government’s Renewed Hope Agenda and efforts to bridge Nigeria’s digital divide.
Importantly, the Committee emphasized that the borrowing plan does not represent fresh borrowing for the 2025 fiscal year, as it aligns with the already approved Medium-Term Expenditure Framework (MTEF). The inclusion of these projects is expected to ease funding disbursement delays that hinder capital project execution.
Selection of Projects and Their Impact
According to the Committee, the selection of projects was based on rigorous economic evaluation and their anticipated contribution to national development, including job creation, entrepreneurship, skills development, and poverty alleviation.
The loans will be sourced on concessional terms from development partners, offering low interest rates, extended moratoriums, and long repayment periods, supporting Nigeria’s fiscal sustainability.
Highlighted projects to be funded include the $1.5 billion Hope Health Education and Governance Project; $980 million Fibre Optics Network project; $500 million Sustainable Power and Irrigation Programme; and a $500 million scale-up of the Rural Access and Agricultural Market initiative.
“These interventions are expected to reduce food inflation, boost export earnings, create millions of jobs, and stabilize the naira through enhanced external reserves,” the Committee noted.
The €65 million grant component, which requires no repayment, is set to support climate resilience and gender empowerment initiatives.
Debt Sustainability and Economic Projections
Despite the expanded borrowing, the Committee assured that Nigeria’s debt remains sustainable, with a debt-to-GDP ratio of around 50%, still below the 56% international benchmark. It added that the administration has reduced the debt service-to-revenue ratio from over 90% to below 70%.
Revenue projections under the 2025 Nigerian Tax Act are expected to grow by over 18% year-on-year from 2026, enhancing the country’s capacity to meet its debt obligations.
Twelve states, including Abia, Bauchi, Borno, Gombe, Kaduna, Katsina, Lagos, Niger, Oyo, Sokoto, Yobe, and Zamfara, are set to benefit from the approved concessional loans for infrastructure, clean energy, water transport, education, and healthcare projects.
In compliance with the Fiscal Responsibility Act (FRA) 2007, the House also approved the capital raising of $2 billion for the foreign currency-denominated issuance programme, aimed at broadening Nigeria’s funding base and integrating informal forex holdings into the formal economy.
Following the approvals, the House adjourned for its annual recess and is expected to reconvene on Tuesday, September 23, 2025.
