Edun: Impression Nigeria Will Borrow $25 Billion in Two Years Erroneous

•Says AfDB’s positive report on Nigeria’s inflation outlook anchored on FX stability, local production reforms 

•Declares stabilised economy positions Nigeria to reap big from AfCFTA

Nume Ekeghe in Abidjan

The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, yesterday dismissed widespread claims suggesting that the country plans to borrow $25 billion within one to two years, calling such impressions as totally erroneous and misleading.

Responding to a THISDAY question on the sidelines of the ongoing African Development Bank (AfDB) Annual Meetings in Abidjan, Côte d’Ivoire, Edun clarified that the figure being widely circulated misrepresents the government’s statutory external rolling borrowing plan submitted to the National Assembly as part of its medium-term expenditure framework.

President Bola Ahmed Tinubu had on Tuesday, formally requested the approval of the National Assembly to secure a new wave of multi-currency loans amounting to approximately $23.5 billion, €2.265 billion, ¥15 billion, and N757.9 billion.

Specifically, the President is seeking approval for the capital raising of up to $2 billion in the domestic debt market. This, he said, was to ensure the implementation of the Presidential Executive Order on foreign currency-denominated financial instrument local issuance programme. Also, the President requested the approval of the legislative arm for the federal government’s 2025-2026 external borrowing plan.

But Edun revealed that the actual borrowing plan for 2025, was $1.2 billion through the Debt Management Office (DMO) and up to $2 billion via the multilateral borrowing programme. These, he said are tied to specific projects and would be disbursed over time, not in a lump sum.

He said: “The submission of the external rolling borrowing plan to the National Assembly is an obligation under the Medium-Term Expenditure Framework as well as the Debt Management Office Act.

“We are required every two years to submit a three-year rolling plan of external borrowing. It gives a picture of the projects the country plans to finance federal projects, state projects, and regional projects that cut across multiple states. These include road projects, rail, ports, irrigation, agriculture, health, and education.

“But the impression that Nigeria will borrow $25 billion in one or two years is totally erroneous and incorrect. That is a misinterpretation of the external rolling borrowing plan.

“If you want to know how much will be borrowed in a given year, according to our plan, in 2025 the external borrowing is just $1.2 billion by the DMO and up to $2 billion under the multilateral borrowing program.

“This multilateral borrowing is tied to specific projects, and the funds are disbursed over time. It’s concessional, cheap financing from the likes of the World Bank, African Development Bank, JICA, AFD, and others.

“So again, it’s totally wrong to assume Nigeria would borrow $25 billion in a single year.”

Edun, while commenting on the AfDB’s African Economic Outlook report, which forecasted that Nigeria’s inflation could fall to around 17.3 per cent by 2026. He noted that the projection reflects a positive response to the government’s ongoing macroeconomic reforms.

“Nigeria’s inflation rate is expected to drop due to the stabilisation of the exchange rate, which has come down from its highs and is projected to at least remain stable, if not decline,” he said.

He also highlighted improved food production, ramped-up agricultural activities, and competitive pricing in the petroleum sector, particularly due to local refining and the transition to Compressed Natural Gas (CNG), as key drivers of anticipated disinflation.

Edun explained that the combination of these reforms have begun to restore confidence and would continue to moderate price pressures in the medium term, aligning with AfDB and World Bank outlooks.

 “Nigeria’s inflation rate is projected to drop to around 17.3 per cent. That is very much a function of the exchange rate having stabilised. “If anything, it has come down from its highs and is projected to at least remain stable, if not decline. That’s a big factor in inflation.

“Secondly, food inflation, there’s been a ramp-up in agricultural production, and that effort is set to continue. We’ve seen that with the advent of local refining of petroleum products and competition.

“There’s local refining, but still competition in that sector, which, along with the shift to Compressed Natural Gas (CNG) a lower-priced form of fuel is leading to lower fuel prices.

“When you add all those factors together, plus the fact that with the exchange rate Nigeria has now, we are competitive in terms of manufactured exports these are some of the factors contributing to increased production and lower prices, helping to anchor and hopefully bring down inflation.”

Furthermore, he offered insight into Nigeria’s strategy under the African Continental Free Trade Area (AfCFTA), stating that the country was now positioned to benefit significantly from its newly stabilised economy.

“In the two years of President Tinubu’s administration, we’ve removed major macroeconomic distortions. The economy is now stabilised and set for growth. That growth will be export-led,” he stated.

According to Edun, Nigeria’s stable and competitive exchange rate makes the country’s goods price competitive for export within the African market.

He noted that Nigeria is actively aligning with ECOWAS tariff conventions and was committed to reducing input costs for local manufacturers by facilitating low or zero tariffs on raw materials, spare parts, and capital equipment.

This, he added, makes Nigeria “An attractive location for production not just for the domestic market, but also for exports across Africa.”

Edun added: In the two-year period of the Tinubu administration, major macroeconomic distortions have been removed. The economy has been stabilised and is now set for growth. That growth will be export-led. Manufactured exports are now a viable option for Nigeria.

“We have a stable and competitive exchange rate, which makes Nigerian goods price-competitive for export to West Africa (about 320 million people) and to the wider African continent of 1.4 billion people under the AfCFTA.

“Nigeria is set to benefit enormously from stabilising its economy and leveraging AfCFTA.

“As a member of ECOWAS and AfCFTA, we are committed to tariff conventions and are working toward compliance with the common external tariff of ECOWAS and other agreements.

“Producers want low or zero tariffs on imports of raw materials, spare parts, and capital equipment so their goods can be competitive when exported.

“Today, Nigeria has substantial refining capacity. Soon, Nigeria will reach 1.2 million barrels per day in crude refining. With related petrochemical capacity, we will be producers of industrial raw materials for various sectors, including chemicals, paints, fertilizers, textiles, and building materials.

“This makes Nigeria an attractive place to locate factories for domestic and export production and it’s already happening.”

On Nigeria’s $500 million replenishment commitment to the Nigeria Trust Fund (NTF), Edun said the country remains committed to supporting the continent’s poorest and most vulnerable countries through the fund, which is administered by the AfDB.

“The commitment is already made. It’s just a matter of scheduling the funding and making these concessional or even grant funds available to those who need it the most,” he said.

Meanwhile, the AfDB has announced a record-breaking $11 billion in new operations for 2024 and 2025, the highest in the bank’s history, underscoring its growing role in financing Africa’s transformation amid global headwinds.

The disclosure came during the presentation of the 2025 Annual Development Effectiveness Review (ADER), the bank’s flagship results report, yesterday at the ongoing Annual Meetings of the AfDB in Abidjan, Côte d’Ivoire.

The record included $5.5 billion earmarked for climate finance, reinforcing AfDB’s position as a continental leader in mobilising capital for resilience and inclusive growth.

AfDB President Dr. Akinwumi Adesina said: “Africa’s potential is boundless, but realising the opportunities requires strategic investments at scale.

“In a world confronting its challenges, this is the moment for African institutions like the Bank to take the lead in driving the continent’s transformation.”

The 2025 ADER titled, “Supporting Africa’s Resilience and Driving Transformation,” assesses progress made in 2024, the first year of implementation under the bank’s new Ten-Year Strategy (2024–2033). It also marked the first review conducted using the new Results Management Framework (RMF), which streamlines performance measurement across areas such as governance, youth empowerment, climate resilience, and gender equality.

Meanwhile, speaking exclusively with THISDAY, Deputy Chief Executive Officer of the Pan-African Payment and Settlement System (PAPSS), John Bosco Sebabi, called on commercial banks across Africa to open settlement accounts with Afreximbank and shift away from correspondent banking arrangements that currently route intra-African transactions through institutions in the US and Europe.

“Today, banks are doing transactions across Africa, but eight of them are settled outside of Africa,” Sebabi said.

“They’re doing it through correspondent banking. That means they open settlement accounts with their correspondents out of Africa, in the US and Europe.”

Sebabi argued that this model was both inefficient and costly, particularly for Africa’s trade ambitions under AfCFTA. Instead, he urged banks to localise settlements by working directly with Afreximbank, enabling transactions to be paid and settled instantly within Africa.

To support this shift, Afreximbank has put in place a liquidity facility to provide short-term settlement support for banks that may temporarily lack sufficient funds, thereby ensuring settlement security and mitigating systemic risk.

“The banks just need to come and use them. They can borrow from us and use that,” he said.

Sebabi also disclosed that PAPSS was working on an Exchange Rate Mechanism to enable currency convertibility across the continent, reducing dependency on the US dollar. However, he acknowledged that the process would take time and currently operates on a model where local currency payments are made while only the net difference is settled in dollars—a structure that reduces pressure on importers.

“At the outset, the importing countries are saved from mobilising the gross amounts to only the net amounts,” he explained.

On the question of how much liquidity was currently circulating through African banks for cross-border settlement, Sebabi noted that each bank estimates its settlement fund requirements based on its trade volumes. There is no fixed minimum.

“Some banks’ trade volumes are in the hundreds of millions. Others, tens of millions. It depends on the bank and if there’s no liquidity to settle, the bank has a fallback, they can take from Afreximbank, including an overdraft facility.”