Abuja — The House of Representatives has approved President Bola Tinubu’s request to borrow $2.35 billion to finance part of the 2025 budget deficit. Lawmakers also endorsed the President’s proposal to issue a $500 million debut sovereign sukuk in the international capital market to fund infrastructure projects and diversify Nigeria’s financing sources.
The approval followed the consideration of a report by the House Committee on Aids, Loans, and Debt Management during plenary on Wednesday. The green chamber sanctioned the implementation of a new external borrowing plan worth ₦1.84 trillion (approximately $1.23 billion) at the budget exchange rate of ₦1,500 to $1, as stipulated in the 2025 Appropriation Act. The funds will be used to partly finance the ₦9.27 trillion budget deficit.
Earlier this month, President Tinubu had written to the National Assembly seeking approval for the borrowing plan. He cited Sections 21(1) and 27(1) of the Debt Management Office (Establishment) Act, 2003, which require legislative consent for new loans and refinancing arrangements.
In his communication to the lawmakers, the President explained that the funds would be raised through one or a combination of Eurobonds, loan syndications, or bridge financing facilities, depending on market conditions at the time of issuance. He added that the pricing of the new Eurobonds is expected to align with existing yields on Nigeria’s international bonds, which currently range between 6.8 percent and 9.3 percent, depending on maturity.
Speaking on the proposed $500 million sovereign sukuk, President Tinubu said the initiative would help diversify Nigeria’s investor base and deepen the federal government’s securities market. The proceeds, he noted, will be channeled towards the development of critical infrastructure projects across the country.
The President highlighted that between 2017 and 2025, the federal government successfully raised over ₦1.39 trillion through domestic sukuk issuances to fund major road and infrastructure projects. The planned external sukuk, he said, will complement these domestic efforts by opening new funding opportunities.
“It is imperative to open new sources of funding for the federal government and to deepen the FGN securities market,” President Tinubu stated in his letter to the National Assembly. “The proposal is for the House of Representatives to approve the issuance of a stand-alone debut Sovereign Sukuk, with or without credit enhancement (Guarantee) from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a member of the Islamic Development Bank (IsDB) Group.”
According to the proposal, 25 percent of the sukuk proceeds may be used to repay existing high-cost debt, while the remainder will be allocated to infrastructure financing. The borrowing plan, Tinubu added, forms a central part of his administration’s fiscal strategy to strengthen foreign reserves, stabilize the naira, and fund critical infrastructure projects, despite Nigeria’s growing debt obligations.