KEY POINTS
- The House approved Tinubu’s $2.35 billion external loan request.
- Lawmakers also cleared a $500 million debut sovereign sukuk.
- Funds will finance the 2025 budget deficit and infrastructure.
Nigeria’s House of Representatives has approved President Bola Tinubu’s request to borrow $2.35 billion to help fund the 2025 budget deficit and stabilize public finances.
The House also endorsed the issuance of a $500 million debut sovereign sukuk in the international capital market, a first for Nigeria to support critical infrastructure and broaden the country’s funding options.
The approvals followed the adoption of a report by the Committee on Aids, Loans and Debt Management during Tuesday’s plenary.
$2.35 billion loan and sovereign sukuk gain green light
Lawmakers ratified a new external borrowing of N1.84 trillion (about $1.23 billion) as captured in the 2025 Appropriation Act, to finance part of the N9.27 trillion budget deficit.
In his earlier request to the National Assembly, President Tinubu cited provisions of the Debt Management Office Act (2003) requiring legislative consent for new loans.
The president said the government would raise the loan through Eurobonds, loan syndications, or bridge financing, depending on market conditions.
He noted that pricing of the Eurobond issuance would align with yields on existing Nigerian bonds, currently between 6.8 percent and 9.3 percent, depending on maturity.
Sovereign sukuk to diversify Nigeria’s financing base
Tinubu said the proposed $500 million sovereign sukuk would help diversify Nigeria’s investor base and deepen the government securities market.
The government will direct the proceeds to infrastructure development and may use 25 percent of the funds to refinance high-cost debt.
Nigeria raised more than N1.39 trillion between 2017 and 2025 by selling domestic sukuk to pay for big road and infrastructure projects. The new international sukuk is expected to complement those domestic efforts.
“It is imperative to open new sources of funding for the federal government and to deepen the FGN securities market,” Tinubu told lawmakers in his letter.
In conclusion, the House’s approval moves the government closer to implementing the external financing component of the 2025 budget, a key part of Tinubu’s plan to strengthen foreign reserves, stabilize the naira, and boost infrastructure investment.
