The Federal Government has defended its borrowing practices, stating that loans are acquired based on approvals from the National Assembly.
This clarification was made during an interactive session between the Federal Government’s revenue-generating agencies and the National Assembly’s joint committees on finance, budget, and national planning. The session focused on the 2025-2027 Medium-Term Expenditure Framework and Fiscal Strategy Paper.
During the session, revenue-generating agencies, including the Nigeria Customs Service, Nigerian National Petroleum Company Limited, and Federal Inland Revenue Service, presented their performances and revenue projections for the 2025 budget. Despite exceeding revenue targets and generating a combined revenue of N36.952 trillion, the Federal Government still seeks foreign loans, which raised concerns among lawmakers.
Senator Adamu Aliero questioned the need for foreign loans despite increased internally generated revenues. “What is the Federal Government doing with excess revenues generated by the various agencies in view of its unending request for foreign loan approval?” he asked.
Read also: Equities market closes negative as investors lose N123bn
The FIRS boss responded that the requested loans were already part of the appropriation act. “We borrow based on your approvals,” he said. “The loans we are requesting are already part of the budget that you approved.”
Minister of Budget and Economic Planning Senator Atiku Bagudu explained that the borrowing plans were meant to fund the deficit in the 2024 budget, which stands at N9.7 trillion. “Despite revenue targets surpassing by some of the revenue generating agencies, government still needs to borrow for proper funding of the budget, particularly in the area of deficit and productivity for the poorest and most vulnerable,” he said.
Bagudu emphasized that borrowing is necessary for proper funding, particularly in areas of deficit and productivity for the poorest and most vulnerable. “We have a long-term development perspective plan agenda 2050 aiming at GDP per capital of $33,000,” he added.
Minister of Finance and Coordinating Minister of the Economy Wale Edun also stressed that borrowing is necessary despite increased revenues. “We need to borrow to fund the budget and ensure that we are able to deliver on our promises to Nigerians,” he said.
The Federal Government’s defense of its borrowing practices comes as the country’s debt profile continues to rise. Nigeria’s debt stock stands at over N35 trillion, with some experts expressing concerns about the sustainability of the country’s debt. However, the Federal Government has maintained that its borrowing plans are necessary to fund its development agenda and ensure that the country achieves its economic goals.