Nigerian President Paula Tenobo sent an official request to Parliament to agree to an external borrowing plan exceeding $ 21.5 billion, as part of the financing plan for the period 2025-2026, with the aim of filling the financial deficit and supporting the state’s efforts to enhance economic growth.
This step comes within a new government policy that focuses on stimulating investments and achieving extensive structural reforms in the Nigerian economy.
According to a correspondent between the President and Parliament, Reuters said it had seen its details, the plan also included requests to borrow 2.2 billion euros (about 2.5 billion dollars) and 15 billion Japanese yen (about 103.97 million dollars) from external sources, in addition to an internal borrowing of two billion dollars.
This size of borrowing represents about 60% of the total public spending scheduled for the 2025 budget, which reflects a clear trend towards financing major projects through external channels.
This shift in resorting to external borrowing aims to reduce dependence on high -cost local debt, and to encourage foreign investment flow in the form of capitalist contributions instead of loans, in an attempt to contain the escalation of the costs of public debt service.
Investments attract
In his message to Parliament, President Thynubo assured the parliament that “the big gap in infrastructure, in addition to the low domestic demand, imposes the necessity of resorting to a deliberate economic borrowing to fill this deficiency in resources.”
He explained that the borrowing plan will cover various sectors, with a focus on infrastructure, agriculture, health, education, water and security projects, in addition to supporting financial and monetary reforms that contribute to economic growth and create job opportunities.
This move comes in the context of a series of bold economic measures that President Thynobo started since he took power in 2023, canceling government support for hydrocarbons, and editing the local currency exchange rate (Al -Nurai), in an attempt to attract investments and stimulate growth.
However, these economic measures led to a sharp increase in inflation rates, and caused high commodity prices.
In a report issued this month, the World Bank stated that the Nigerian economy recorded in 2024 the fastest growth rate for nearly a decade, driven by strong performance during the last quarter of the year, and tangible improvement in the general financial situation.
However, the report warned of the continued challenges related to high inflation, considering it one of the most prominent obstacles to sustainable economic stability in the country.