The Federal Government said, yesterday, that Nigeria can no longer borrow money to fund its budget.
Finance Minister, Mrs Kemi Adeosun, who disclosed this at a business forum in Abuja, said the country must explore other means, such as taxes, to run the government.
She said Nigeria would no longer seek such loans or an additional $1.5 billion it had planned to raise from international debt markets.
"We cannot borrow anymore; we just have to generate funds domestically enough to fund our budget. Mobilise revenue to fund the necessary budget increase," she was quoted as saying by Reuters.
The minister's comment calls into question the plan by the Federal Government to obtain foreign loans of about $2 billion from lenders such as World Bank.
The government had planned to borrow extensively from overseas to fund its record N7.44 trillion (about $24.39 billion) 2017 budget aimed at helping the country spend its way out of its first economic recession in about 25 years.
Nigeria's external debt increased to $13.8 billion in the first quarter of 2017 from $11.4 billion in the fourth quarter of 2016, while the nation's total actual external debt service payment in the first quarter was about $128 million.
Plans by World Bank and African Development Bank to loan at least $2 billion to Nigeria have been stalled for over a year as international organisations' frustrations mounted over the country's refusal to impose key fiscal reforms, such as allowing its foreign exchange rate to float freely.
In May, Ben Akabueze, Director-General of Budget Office of the Federation, said the country had a shortfall of $7.5 billion for its 2017 budget expenditure, and said that would be addressed with $3.5 billion from the aforementioned loans and debts.
Akabueze had also said government planned to raise $4 billion from the local debt market.
The nation's record N7.44 trillion budget for 2017 was assented to by Acting President, Prof. Yemi Osinbajo, in June, after delays.
The plan projects a deficit of N2.21 trillion, implying a deficit equivalent to 2.18 per cent of Nigeria's gross domestic product.