Nigeria Shifts From Costly External Borrowing to Private Capital–Driven Growth, Says Edun

Nigeria Shifts From Costly External Borrowing to Private Capital–Driven Growth,  Says Edun

JOEL OLADELE, Abuja

The Federal Government has announced a deliberate shift from expensive external borrowing to a growth strategy anchored on private capital, domestic reforms and diversified financing instruments.

This was disclosed in a statement signed on Thursday by the Assistant Director, Information and Public Relations, Ministry of Finance, following the opening session of the G-24 Technical Group Meeting held in Abuja.

Speaking at the meeting themed “Mobilizing Finance to Promote Sustainable, Inclusive, and Job-Rich Economic Transformation,” the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said Nigeria was repositioning its economy in line with evolving global development finance priorities.

Delivering a keynote address on the global economy and the need for stronger South-South cooperation, Edun said, “Nigeria is deliberately shifting away from a model overly reliant on expensive external borrowing toward a more resilient growth framework powered by domestic reforms, private capital, and diversified financing instruments.”

He explained that the new direction emphasises innovative financing, blended instruments and expanded concessional windows. According to him, Nigeria is targeting an average medium-term growth rate of seven per cent, which would require raising the investment-to-GDP ratio to at least 30 per cent.

“With the current public sector’s financing capacity at roughly five per cent of GDP, the strategy emphasizes attracting private capital through structured PPPs, optimizing public assets, and creating bankable, de-risked investment opportunities,” Edun stated.

The Minister noted that the reform programme under President Bola Tinubu’s administration is anchored on a three-phase agenda of market correction, stabilization and growth acceleration.

He said over the past two years, the government had implemented “bold, politically difficult but necessary reforms aimed at restoring macroeconomic stability,” adding that the measures had laid the foundation for a more competitive and resilient economy.

Edun pointed to early signs of improvement, saying investor confidence was gradually returning.

“The reform path has attracted global recognition, and investor sentiment is steadily recovering. This renewed confidence is reflected in the return of significant capital commitments to Nigeria,” he said.

He described the current global environment as one marked by fragmentation, geopolitical rivalry and weakening multilateral institutions.

According to him, deepening geoeconomic confrontation could reduce global output by two percentage points and shrink global trade by 2.3 per cent, with emerging and developing economies bearing the brunt.

Edun revealed that through broad-based tax reforms, a modernized tax law and improved compliance and automation; including the National Single Window initiative, Nigeria aims to raise its tax-to-GDP ratio to 18 per cent in the medium term.

He stressed that countries in the Global South must no longer depend on external capital flows to drive development.

“The era of waiting for trickle-down prosperity from the North has passed. The future belongs to regions that collaborate, innovate, and integrate with purpose,” the Minister said.

Edun urged members of the G-24 to push for reforms of the global financial architecture, including strengthening the IMF’s global financial safety net, expanding concessional lending by multilateral development banks and prioritising local currency financing.

He said such reforms are critical for countries that have lost access to international capital markets and to bridge the widening Sustainable Development Goals financing gap.

Also speaking at the meeting, the Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, highlighted the critical challenges facing the global economy. He called for stronger policy coordination, mutual trade and investment among emerging economies to build resilience.

Cardoso emphasised the need for urgent reforms in digital cross-border payment systems, noting that they could promote inclusive growth and strengthen global financial stability.

He outlined Nigeria’s efforts to modernize its regulatory and supervisory frameworks, including strengthening oversight of payment infrastructure providers and enhancing anti-money laundering measures.

He stressed the importance of transparency, credibility and cooperation among African nations to build stronger and more resilient financial systems.

Earlier in her opening remarks, the Director and Head of Secretariat of the G-24, Dr. Iyabo Masha, described the global economy as experiencing “measured resilience but constrained ambition.” She warned that emerging market and developing economies must move beyond recovery and restore sustainable growth paths.

Although inflation has moderated in some economies and supply disruptions have eased, Masha cautioned that “resilience is not the same as robustness,” noting that global conditions remain fragile.

She disclosed that global merchandise trade growth for 2026 is projected at just 0.5 per cent, reflecting the cumulative impact of tariffs and policy uncertainty. She added that policy space for emerging and developing economies is tightening, with external public debt service reaching $487 billion in 2023.

Masha identified near-term risks to include renewed inflation, supply shocks, abrupt tightening of global financial conditions, deepening trade fragmentation and prolonged debt distress. She urged policymakers to strengthen fiscal and monetary frameworks, expand domestic resource mobilisation, prioritise climate adaptation and human capital development, and deepen regional trade and investment partnerships.

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun with the Minister of Budget and National Planning, Senator Atiku Bagudu (rt), Minister of State for Finance, Dr. Doris Uzoka-Anite, Dr. Iyabo Masha, Director and Head of the Secretariat of the G-24 and the CBN Governor, Dr. Olayemi Cardoso at the G-24 2026 Technical Group meeting today in Abuja.