EXTERNAL LOANS (REHABILITATION, RECONSTRUCTION AND DEVELOPMENT) ACT
Act · Finance
An Act provides authority for Nigeria to contract external loans for rehabilitation and development purposes. It targets the federal government, lenders, and the Debt Management Office. This ensures loans serve approved development goals.
EXTERNAL LOANS (REHABILITATION, RECONSTRUCTION AND DEVELOPMENT) ACT
What Is This Policy?
An Act providing the legal authority for Nigeria to contract external loans for rehabilitation, reconstruction, and development purposes, and setting conditions for such borrowing.
Who Does It Target?
Federal Government as the primary borrower Multilateral and bilateral lenders The Debt Management Office National Assembly for ratification of major loans
What Does It Aim to Achieve?
Provide constitutional and statutory authority for Nigeria's external borrowing for capital development, ensuring loans are used for approved development purposes.
Key Features
Borrowing Authority: Grants the Federal Government authority to contract external loans for prescribed development purposes. Purpose Restriction: Loans must be used for rehabilitation, reconstruction, and development — not recurrent expenditure. Accountability: Requires proper accounting and reporting of all external loan disbursements. Repayment Obligation: Establishes Nigeria's binding commitment to repay external loans in accordance with agreed terms.
Current Status
Rollout Stage: Active Coverage: Federal Government external borrowing Beneficiaries: Nigerian public through development financing Funding: External loans repaid from government revenues
How to Access
External loan proposals submitted through DMO to FEC National Assembly approval required for major external loans Loan proceeds must be channelled through CBN and DMO Application method: Engage DMO for external loan structuring and approval.
Important Terms
External loans create contingent liabilities on the Federation Account Loan proceeds diverted from stated purposes attract prosecution All external loans appear in the Nigerian external debt register
Official Resources
Website: https://www.dmo.gov.ng Contact: Debt Management Office (DMO) / Federal Ministry of Finance
Legal Framework
Enacted under the legislative powers of the National Assembly vested by Section 4 of the 1999 Constitution (as amended). Operates alongside the Debt Management Office (Establishment, etc.) Act, the Fiscal Responsibility Act 2007, the External Loans Act, and the CBN Act 2007. Aligns with World Bank and African Development Bank loan agreement standards, IMF concessional financing guidelines, and the Commonwealth Code of Good Practice on Debt Management.