Tinubu’s £16bn Loan Proposal: What It Really Means for Nigeria

Image: The Nation

President Bola Ahmed Tinubu’s recent request to the National Assembly for a substantial external borrowing plan has sparked debate and confusion. However, the Presidency and the Ministry of Finance have moved to clarify the situation, stating that the proposal is part of a wider national financing strategy, not an immediate loan to be drawn in the current fiscal year.

A National Plan, Not Just Federal Borrowing

The plan, which spans 2025 to 2026, outlines proposed borrowings by both federal and state governments—across all six geopolitical zones. It includes potential funding from international partners and development institutions. Crucially, this is a forward-looking strategy, not an instant decision to plunge the nation further into debt.

According to the Ministry of Finance, the actual borrowing for any given year will still be determined and approved within that year’s budget. For instance, the 2025 budget only includes an external borrowing component of $1.23 billion, which has yet to be accessed.

Breaking Down the Numbers

President Tinubu’s formal submission to the National Assembly includes a complex blend of projected loans:


$2 billion for infrastructure-related domestic financing


$21.5 billion in external loans


Over €2 billion in euro-denominated loans


15 billion Japanese yen


€65 million in grant funding


₦757.9 billion in local currency borrowing

These amounts reflect cumulative needs across federal and state-level projects, not a sudden draw on Nigeria’s credit card.

Why Now? A Long-Term Financing Framework

The Ministry explained that the loan plan is structured as part of Nigeria’s Medium-Term Expenditure Framework (MTEF). This is a rolling scheme—meaning funds will be disbursed gradually, according to project milestones and timelines, many of which stretch over five to seven years.

Projects covered include key infrastructure like power transmission, fibre optic networks, irrigation schemes to improve food security, military aircraft procurement, and upgrades to roads and rail networks.

Who’s Lending to Nigeria?

Most of the funding will come from Nigeria’s established development partners. These include the World Bank, African Development Bank, AFD (France), the European Investment Bank, Japan’s JICA, China EximBank, and the Islamic Development Bank. The loans offered by these institutions are generally concessional, meaning they come with low interest rates and extended repayment periods.

States Included in the Plan

Several state governments—Abia, Bauchi, Borno, Gombe, Kaduna, Lagos, Niger, Oyo, Sokoto, and Yobe—are included in the plan. It’s worth noting that states cannot borrow from international lenders without the Federal Government’s guarantee. Therefore, all such requests must pass through the National Assembly.

According to presidential aide Dada Olusegun, this consolidated approach was adopted to avoid having to go back to the Senate repeatedly for piecemeal approvals. Instead, a comprehensive plan covering both federal and state needs has been presented for the 2025–2026 period.

Borrowing with Caution and Purpose

The government stressed that National Assembly approval does not equate to automatic disbursement. Many of the included projects might not be financed immediately, and some may never be utilised at all—depending on evolving priorities and funding conditions.

Importantly, the government is keen to position the borrowing plan as a tool for responsible planning, not reckless accumulation of debt. According to the Ministry of Finance, every project must demonstrate clear economic value and contribute to long-term development.

Debt Management and Economic Outlook

Nigeria’s debt service-to-revenue ratio, which was above 90% in 2023, is reportedly improving due to ongoing fiscal reforms. These include halting inflationary borrowing from the Central Bank and increasing revenue through improved remittances from government-owned enterprises (GOEs) and ministries.

The government also expects increased revenue from the Nigerian National Petroleum Company Limited (NNPCL) and is actively recovering legacy debts owed to the federal purse.

Sustainable Investment Over Reckless Borrowing

The Ministry reiterated that loans will be kept within the thresholds outlined in Nigeria’s Debt Management Office (DMO) framework. With ongoing tax reforms and modernised revenue collection systems, the government hopes to lessen its reliance on borrowing in the long run.

Olusegun added that loans themselves aren’t inherently bad—it’s how they’re used that matters. The public, he said, should focus on ensuring that borrowed funds go towards meaningful development.

Finally, the administration reaffirmed its commitment to financial transparency, fiscal responsibility, and the pursuit of economic policies that promote inclusive growth—even when such choices require difficult decisions.