The House of Representatives has approved President Bola Tinubu’s request to borrow $2.35 billion to help finance part of the 2025 budget deficit. The lawmakers also endorsed the President’s plan to issue a $500 million debut sovereign sukuk in the international capital market to fund infrastructure projects and diversify Nigeria’s sources of financing.
The approval followed the consideration of a report by the Committee on Aids, Loans, and Debt Management during plenary yesterday.
Under the resolution, the House approved the implementation of a new external borrowing of N1.84 trillion (equivalent to $1.23 billion) at an exchange rate of N1,500 to $1, as provided for in the 2025 Appropriation Act. The funds will help finance part of the N9.27 trillion budget deficit.
Earlier this month, President Tinubu had written to the National Assembly seeking legislative approval for the new loans. He cited Sections 21(1) and 27(1) of the Debt Management Office (Establishment) Act, 2003, which mandate National Assembly approval for new borrowings and refinancing arrangements.
The President explained that the funds would be raised through one or a mix of financial instruments such as Eurobonds, loan syndications, or bridge financing facilities, depending on market conditions. He noted that the pricing of the proposed Eurobonds would align with existing Nigerian bonds in the international market, currently yielding between 6.8% and 9.3%, depending on maturity.
Regarding the $500 million sovereign sukuk, Tinubu said the initiative would help diversify Nigeria’s investor baseand expand the government securities market. He explained that proceeds from the sukuk would be used to fund critical infrastructure projects nationwide.
The President also highlighted that since 2017, the federal government had raised over N1.39 trillion through domestic sukuk issuances, which were used for key road and infrastructure projects. The new external sukuk, he said, would complement these efforts and provide fresh funding options.
“It is imperative to open new sources of funding for the federal government and deepen the FGN securities market. The proposal seeks the House’s approval for the issuance of a stand-alone debut sovereign sukuk, with or without credit enhancement from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a member of the Islamic Development Bank Group,” Tinubu wrote.
He further stated that 25% of the proceeds from the sukuk may be used to repay existing high-cost debts, while the remainder would be directed toward infrastructure financing.
The borrowing plan forms part of the Tinubu administration’s broader fiscal strategy to stabilise the naira, strengthen foreign reserves, and fund vital infrastructure projects amid rising debt obligations. The House’s approval marks a significant step in implementing the external financing component of the 2025 Appropriation Act.
