Spread the love

Nigeria’s President urges National Assembly approval for external borrowing and sovereign Sukuk issuance as part of a broader fiscal strategy

Abuja, Nigeria – October 10, 2025 | DocuNews Central: President Bola Ahmed Tinubu has written to the Senate, seeking approval to raise $2.35 billion in external loans. The request aims to part-finance Nigeria’s 2025 budget deficit and refinance maturing Eurobonds. The President also proposed issuing a $500 million sovereign Sukuk to fund key infrastructure projects.

This financial move highlights the administration’s drive to mobilize external capital, reduce domestic debt strain, and strengthen investor confidence in Nigeria’s creditworthiness.

Key Elements of Tinubu’s Proposal

In a letter read by Senate President Godswill Akpabio, Tinubu detailed the breakdown and rationale of the borrowing plan. (Vanguard Nigeria)

  • $1.229 billion will help fund the 2025 Appropriation Act.
  • $1.118 billion is earmarked for refinancing Nigeria’s Eurobonds maturing in November 2025.
  • The plan includes issuing a $500 million sovereign Sukuk in the international capital market to attract Islamic finance investors.

Tinubu’s letter explained that the loans could be raised through Eurobonds, syndicated loans, bridge facilities, or direct borrowing from international financial institutions. (BusinessDay Nigeria)

Part of a Broader Borrowing Framework

The request aligns with Nigeria’s long-term fiscal plan. Earlier this year, the Senate approved over $21 billion in external borrowing for infrastructure, health, and security projects. (Reuters)

Analysts note that the $2.35 billion component addresses immediate budgetary needs and upcoming debt maturities. It also supports the government’s fiscal reform drive, which includes fuel subsidy removal, exchange-rate unification, and broader tax reforms. (Premium Times)

Why Tinubu’s Government Is Seeking This Loan

1. Bridging the Fiscal Gap

Nigeria’s 2025 budget projects a significant deficit. The proposed loan helps close this gap without further pressuring local borrowing markets.

2. Refinancing Maturing Eurobonds

The 2018 Eurobond of $1.118 billion is due in November 2025. Tinubu’s team hopes refinancing will prevent default and preserve Nigeria’s global credit profile.

3. Expanding Funding Options

The introduction of a sovereign Sukuk opens access to Islamic finance markets, providing an alternative stream of funds with potentially lower interest rates.

4. Strengthening Fiscal Stability

Through diversified borrowing, Nigeria can balance its debt profile while keeping repayment terms sustainable.

Legislative Steps and Reactions

Senate President Akpabio referred the letter to the Senate Committee on Local and Foreign Debts, chaired by Senator Aliyu Wamakko, for review within one week. The House of Representatives also received the same request through Speaker Abbas Tajudeen. (Vanguard Nigeria)

Both committees are expected to analyze the loan terms, repayment structure, and potential impact on Nigeria’s debt sustainability before any approval.

Concerns and Criticisms

Although the proposal aims to stabilize Nigeria’s economy, several experts caution about potential risks:

  • Rising debt burden: Nigeria’s external debt already consumes a significant share of its annual revenue.
  • Exchange rate volatility: Currency depreciation could inflate the cost of repaying foreign loans.
  • Market sensitivity: Global interest rate changes may affect borrowing costs and investor sentiment.
  • Implementation concerns: Critics warn that if the funds aren’t invested productively, the loans could deepen fiscal strain.

Despite these risks, the government maintains that borrowing remains vital for stimulating growth, improving infrastructure, and sustaining development momentum.

Media Outlets Reporting the Same Story

  • Reuters confirms the plan, citing a $2.3 billion figure and a $500 million Sukuk issuance.
  • BusinessDay Nigeria highlights the borrowing mechanisms and projected budgetary benefits.
  • Vanguard Nigeria provides detailed insights into legislative procedures.
  • Premium Times explains investor expectations and political implications.
  • Arise TV reports that the total package could reach $2.8 billion, depending on final structuring.

Next Steps in the Legislative Process

The Senate and House committees will vet the borrowing terms, question finance officials, and report back for a plenary vote. Amendments or partial approvals could follow. Final execution depends on global market conditions and Nigeria’s credit rating.

Why This Decision Matters to Nigerians

Borrowing affects everyone. It shapes inflation, exchange rates, and public investment. If managed well, this loan could boost power, transport, and job-creation projects. If mismanaged, it risks worsening debt distress.

Citizens, therefore, await transparent communication on how each dollar will be applied, and whether fiscal discipline will follow to ensure accountability.

Conclusion

President Tinubu’s request for $2.35 billion in external loans and a $500 million sovereign Sukuk signals a decisive step in Nigeria’s economic management. It balances the urgency of meeting budgetary gaps with the responsibility of sustaining investor trust.

While the proposal has attracted scrutiny, many economists believe it could strengthen fiscal resilience if the government maintains transparency and ensures that borrowed funds translate into visible national development.

DocuNews Central will continue to track legislative deliberations and public reactions to this significant fiscal move.

Copyright © 2025. All rights reserved | DocuNews Central