The Federal Government of Nigeria has reiterated that its $21.7 billion external borrowing proposal is intended to fund productive projects, not to finance consumption, and that it will pursue a single‑digit inflation rate by the close of 2027. The statements were made on Wednesday after a Federal Executive Council (FEC) meeting chaired by President Bola Tinubu at the State House, Abuja.
Key points disclosed by Minister of Finance and Coordinating Minister of the Economy Taiwo Oyedele include:
- The borrowing package totals $20.52 billion plus €1.045 billion, equating to roughly $21.7 billion.
- About $10.6 billion is earmarked for transport infrastructure such as the Sokoto‑Badagry and Lagos‑Calabar highways and the Kano‑Kaduna railway.
- Development partners are expected to provide around $7.9 billion, with a $5 billion World Bank component at an average 2.1 % concessional rate.
- Inflation fell to 14.63 % in September 2024, down from a 34 % peak the previous year.
- Gross foreign‑exchange reserves have risen above $55 billion – the highest level in 18 years.
"Altogether, if you convert the euro amount and add it to the dollar amount, it will come up to $21.7bn. And we’ve seen some people with commentary saying that we are borrowing X, Y, Z," Oyedele said, emphasizing that the figure represents a plan, not a commitment to draw the full amount.
What does the borrowing plan cover?
The minister explained that the loan would finance projects across transportation, security, health, agriculture, energy, digital infrastructure, education and social protection. Each initiative is expected to have an average implementation horizon of five years, delivering long‑term economic returns.
How is the financing structured?
Nigeria is seeking funds from both multilateral and bilateral sources. Roughly $7.9 billion is projected to come from development institutions, while the World Bank component would carry a concessional interest rate of about 2.1 %. Certain social‑sector facilities are slated to attract rates near 2 %.
What are the inflation and fiscal targets?
Oyedele noted that inflation dropped from 20.98 % in September 2023 to 14.63 % in September 2024, and the government aims to push it into single‑digit territory by 2027. The FEC also resolved to keep price‑stabilising measures, especially for food, while expanding spending on infrastructure, human‑capital development and job creation.
What is the status of reserves and fiscal metrics?
External reserves have surpassed $55 billion, the strongest level in nearly two decades, while net reserves have climbed above $45 billion from under $1 billion three years ago. Economic growth was recorded at 4.43 % in Q2 2024, up from 2.74 % in May 2023. The tax‑to‑GDP ratio is projected to rise from about 7 % in 2023 to 12.5 % by the end of 2025, and the debt‑service‑to‑revenue ratio is expected to fall from 97 % to below 60 %.
How is the government handling the petrol subsidy removal?
Oyedele argued that the legacy subsidy placed an unsustainable strain on public finances and hindered investment in essential services. Targeted social interventions have been introduced, with over 10 million households receiving more than ₦600 billion in cash transfers, and the Nigerian Education Loan Fund disbursing ₦372.6 billion to 1.5 million students. Over 800,000 micro, small and medium enterprises have accessed subsidised loans at single‑digit rates.
What tax reforms have been introduced?
Individuals earning up to ₦100,000 per month are now exempt from personal income tax. Qualifying businesses with annual turnover not exceeding ₦100 million enjoy exemptions from corporate income tax, value‑added tax and withholding tax.
What is the outlook for the 2027 budget?
Minister of State for Budget Dr Doris Uzoka‑Anite confirmed that the 2027 Appropriation Bill will be tabled before the National Assembly by the end of 2026, giving lawmakers ample time to scrutinise the fiscal plan ahead of the 2027 financial year. Detailed allocations, revenue forecasts and deficit financing remain to be announced.
Overall, the government maintains that the borrowing plan is a strategic investment programme designed to spur infrastructure development, curb inflation and strengthen Nigeria’s fiscal position.