By Nduka Chiejina,The Nation

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The Federal Government has disclosed plans to refinance Nigeria’s expensive debt portfolio as part of ongoing efforts to reduce the nation’s debt service costs and overall cost of borrowing.

Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, made this known on Tuesday at the 55th Annual Conference of the Institute of Chartered Accountants of Nigeria (ICAN) held in Abuja.

Edun explained that the decision to refinance the country’s high-cost debt was driven by the sharp rise in debt service obligations in recent years.

According to him, “Debt service costs have surged: Treasury bill rates rose from 8% in 2023 to nearly 24 percent, and external debt service almost tripled from budgeted N2.7 trillion to N6.7 trillion in 2024.”

Refinancing expensive debts involves replacing high-interest loans with new, lower-interest facilities aimed at easing the pressure on government finances, freeing up resources for developmental spending, and improving the country’s fiscal sustainability.

The move is consistent with the government’s medium-term growth strategy, which seeks to build a productive economy anchored on private sector investment, openness, and efficiency.

According to Edun: “Our growth strategy is centered on productive capital formation through increased private investment. We are working to achieve output growth of 7.0 percent GDP by 2027/2028, thus enabling the removal of millions of our citizens from poverty.”

He added that the Tinubu administration is determined to transition the Nigerian economy into one driven by competition and innovation, with government acting as a facilitator rather than a dominant player. “We are transitioning to an economy anchored on openness, competition, and efficiency, where the private sector is the engine of growth, and government efficiently plays its role as foreseer and enabler,” he stated.

Edun disclosed that the Federal Government is also making substantial investments in the digital economy to unlock new opportunities for the country’s predominantly young population. He noted that over 65 percent of Nigerians are under the age of 35, presenting a unique demographic advantage that must be harnessed through technology and innovation.

“We are making bold investments in the digital economy. Through Project Bridge, a $2 billion Public-Private Partnership project supported by the World Bank and the African Development Bank, we are expanding fibre optic coverage by 90,000 km, building on the existing 35,000 km network,” the Minister said.

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“Our goal is 70 percent nationwide internet penetration, reaching all LGAs and wards. This initiative addresses digital infrastructure gaps and promotes inclusion, especially for women and youth, paving the way for a tech-driven future,” he added.

Speaking on government finances, Edun stated that Nigeria’s fiscal position has recorded significant improvement in the last two years, noting that revenue has grown by over 70 percent in nominal terms. He attributed the increase to key reforms implemented under President Bola Tinubu’s Renewed Hope Agenda, including the liberalization of the foreign exchange and fuel markets, and the automation of revenue collection systems.

“The demand for development remains high as we strive to improve upon output growth and significantly enhance productivity. In part, this will be achieved by raising our infrastructure stock from its current level of less than 40 percent of output towards the global benchmark of 75 percent,” Edun noted.

He said the government is deploying a range of innovative measures to mobilize domestic resources to meet development financing needs, particularly in a global environment constrained by limited liquidity. Among these initiatives, he mentioned formalizing the large informal sector—particularly in real estate and agriculture—as revealed by the recent rebasing of Nigeria’s GDP figures.

The minister also mentioned the expansion of the tax base through the new Tax Reform Act, which harmonizes tax processes and reduces multiple taxation to enhance productivity. “We are also working to strengthen digital revenue collection platforms,” he added.

According to him, the government is also leveraging “asset financialization by optimizing the federal government’s balance sheets,” with the expectation that subnational governments will adopt similar strategies to improve fiscal efficiency and revenue performance.

On social protection, Edun said the administration is expanding and strengthening its social investment programmes to reach more Nigerians in need. “This is being achieved through enhanced digital identification systems, ensuring that support reaches those who need it most, efficiently and transparently,” he said.