House of Reps Approves Tinubu’s Loan Request to Fund Nigeria’s Budget Deficit

The House of Representatives has approved President Bola Ahmed Tinubu’s request to implement a fresh external borrowing plan worth ₦1.84 trillion (about $1.23 billion) as captured in the 2025 Appropriation Act to help finance the country’s widening budget deficit.

The decision followed the consideration and adoption of a report by the House Committee on Aids, Loans and Debt Management, chaired by Abubakar Hassan Nalaraba, during plenary on Wednesday.

According to the committee, the new borrowing will partly address the ₦9.27 trillion deficit contained in the 2025 fiscal framework.

In a move to ease repayment pressure and stabilise Nigeria’s debt position, the House also approved the refinancing of a $1.12 billion Eurobond (7.625% USD1.118bn due November 2025).

The resolution explained that refinancing the maturing Eurobond would help Nigeria avoid a debt servicing crunch and reduce the risk of volatility in the country’s external obligations.

Beyond the loan and Eurobond refinancing, lawmakers further approved the federal government’s plan to access an additional $2.35 billion through multiple international financing instruments.

These include Eurobond issuance, loan syndications, bridge financing facilities, and other external borrowings from global financial institutions.

According to the resolution, this window of financing will provide flexibility for government funding needs while spreading borrowing risks.

In a bid to diversify Nigeria’s debt instruments and attract Islamic-compliant investors, the House also gave a green light for the issuance of a $500 million debut stand-alone Sovereign Sukuk in the international capital market.

The lawmakers explained that the Sukuk may be issued with or without credit enhancement to make it more competitive and ensure investor confidence.

This is Nigeria’s first independent sovereign Sukuk on the international market, complementing its domestic Sukuk programme, which has been used to fund road and infrastructure projects.

The new borrowing plan, according to the House resolution, aligns with President Tinubu’s fiscal strategy aimed at:

• Strengthening Nigeria’s foreign reserves;
• Stabilising the naira;
• Funding critical infrastructure projects; and
• Managing the country’s growing debt obligations.

Lawmakers noted that the approach was designed to reduce pressure on government finances, attract diverse investment sources, and ensure a sustainable balance between debt servicing and national development.

Naija News reports that Nigeria’s total public debt has been on the rise, with analysts warning about the country’s increasing reliance on external borrowings to plug budget shortfalls.

However, supporters of the plan insist that borrowing remains necessary to fund capital projects, stimulate growth, and reassure investors about Nigeria’s fiscal credibility.

The House resolution underscored the need for responsible debt management and transparency in the deployment of borrowed funds.