Source: Business Insider Africa
Nigeria’s parliament has approved a $6 billion external borrowing plan from Citigroup and First Abu Dhabi Bank, as the government seeks fresh funding to support rising spending needs and ease mounting fiscal pressure.
- Nigeria has approved $6 billion in external loans from Citi and First Abu Dhabi Bank.
- The funds will support infrastructure, debt servicing, and legacy projects.
- The move comes as the budget deficit widens to over 6% of GDP.
- It highlights ongoing fiscal pressure despite Tinubu’s economic reforms.
The approval, granted alongside the 2026 budget, allows Africa’s largest economy to raise $5 billion from First Abu Dhabi Bank and $1 billion from Citi. The funds are expected to finance infrastructure projects, clear outstanding obligations from previous budgets, and support debt servicing.
The borrowing comes as Nigeria expands its 2026 spending plan to about $49.4 billion, reflecting higher allocations to capital projects and legacy commitments carried over from earlier fiscal cycles.
Officials said the external loans would help reduce pressure on the domestic credit market, where heavy government borrowing has in recent years crowded out private sector access to funds and pushed up interest rates.
At least 40% of the new loans will be channelled into capital expenditure across the 2025 and 2026 budgets, signalling a continued focus on infrastructure as the government tries to stimulate growth.
However, the move also underscores Nigeria’s persistent fiscal challenges.
The country’s budget deficit is projected to widen to more than 6% of gross domestic product, equivalent to roughly $22.7 billion, following the upward revision of spending plans.
President Bola Tinubu’s administration has introduced sweeping reforms since taking office, including removing fuel subsidies and liberalising the foreign exchange market, in a bid to strengthen public finances and attract investment.
While those measures have improved government revenues, they have also increased short-term economic strain, leaving the government reliant on additional borrowing to bridge funding gaps.
The 2026 fiscal framework is based on an oil price benchmark of $75 per barrel, with economic growth projected at 4.68%, slightly above the World Bank’s estimate.
Lawmakers said the new borrowing would help ensure that unfinished projects from previous budgets are completed and prevent them from weighing on the current fiscal programme.
The budget and borrowing plan will now be sent to the president for assent.
