The Senate on Tuesday approved President Bola Ahmed Tinubu’s request for an external borrowing plan of over $21 billion for the 2025–2026 fiscal cycle during plenary.
This was sequel to the consideration and adoption of a report of the Senate Committee on Local and Foreign Debt, presented by its Chairman, Senator Aliyu Wamakko (Sokoto North).
The comprehensive borrowing package includes $21.19bn in direct foreign loans, €4bn, ¥15bn, a $65m grant and domestic borrowing through government bonds.
Also included was a provision to raise up to $2 billion through a foreign-currency-denominated instrument in the domestic market.
Among the key sectors targeted in the loan plan are infrastructure, agriculture, security, power, housing, and digital connectivity. One of the major highlights is the allocation of $3 billion for the revitalisation of the Eastern Rail Corridor, stretching from Port Harcourt to Maiduguri.
In his presentation, Wamakko said the plan was first submitted to the National Assembly on May 27 but was delayed due to legislative recess and documentation issues from the Debt Management Office.
In his contribution, the Deputy Senate President, Barau Jibrin (APC, Kano North), said the borrowing plan reflects national inclusiveness. “This shows that the Renewed Hope Agenda is working. No region is left out,” he added.
Also, the Chairman Senate Committee on Appropriations, Senator Solomon Adeola (APC, Ogun West), said most of the loan requests had already been factored into the Medium-Term Expenditure Framework and the 2025 budget.
“The borrowing is already embedded in the 2025 Appropriation Act. With this approval, we now have all revenue sources, including loans, in place to fully fund the budget,” Adeola said.
Similarly, the Chairman Senate Committee on Finance, Sani Musa (APC, Niger East), said “There is no economy that grows without borrowing. What we are doing is in line with global best practices.”
The Chairman Senate Committee on Banking, Insurance and Other Financial Institutions, Adetokunbo Abiru (Lagos East), in his contribution said the loans are strictly tied to capital and human development projects.
It would be recalled that the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr Taiwo Oyedele, had disclosed that the country spends less than 50 per cent of its revenue on debt servicing.
He spoke at the PwC’s Executive Summit on Nigeria’s Tax Reform, with the theme, “The New Tax Era: What Nigeria’s Tax Reform Means to Individuals and Businesses”, in Lagos.
Oyedele explained that the government was spending almost 97 per cent of its revenue on debt servicing before the economic reforms.
“We have cleared unmet forex futures that were more than $7bn. And we move from under $4 billion external reserve to over $20billon today. Budget deficit is declining, and we are spending more on infrastructure.
“Tax to GDP ratio moved from under 10 per cent is now 13.5 per cent in two years. Instead of 97 per cent, service debt is now under 50 per cent in two years. We no longer print money to spend. Rather, we’ve paid down part of the ways and means that the previous administration printed,” he said.
He explained that the country’s currency could have become worthless if the federal government had not embarked on the current economic reforms.
