The House of Representatives has approved President Bola Tinubu’s request to borrow $2.35 billion to finance part of the 2025 budget deficit, in line with the President’s earlier proposal to raise fresh funds from the international capital market.
The approval, granted on Wednesday, also covers Tinubu’s plan to issue a $500 million debut sovereign sukuk in the international capital market to fund key infrastructure projects and broaden Nigeria’s access to alternative financing sources.
The green chamber’s decision followed consideration of the report of its Committee on Aids, Loans and Debt Management, which recommended implementing the new external borrowing of N1,843,669,786,987.16 (equivalent to $1,229,113,000.00) at the budget exchange rate of $1.00/N1,500, as provided in the 2025 Appropriation Act, to part-finance the N9.27 trillion budget deficit.
The approval brings to fruition the financing plan President Tinubu laid before the National Assembly in October, when he asked lawmakers to endorse a comprehensive strategy to raise a total of $2.347 billion from the international capital market.
At the time, Tinubu explained that the borrowing plan was made “pursuant to Sections 21(1) and 27(1) of the Debt Management Office (Establishment, Etc.) Act, 2003,” and was designed to “give effect to the borrowing provisions in the 2025 Appropriation Act, refinance the $1.118 billion Eurobond maturing in November 2025, and expand Nigeria’s access to diversified external funding sources.”
The President also informed lawmakers that the 2025 budget provides for N9.28 trillion in new borrowings to close the fiscal deficit, with N1.84 trillion (equivalent to $1.229 billion) earmarked as new external borrowing.
“The House of Representatives is kindly invited to issue its resolution allowing the government to raise the amount through any of the following options: issuance of Eurobonds, bridge finance facility from bookrunners, loan syndication, or direct borrowing from international financial institutions,” Tinubu wrote.
According to the President, the funds would “be deployed to part-finance the 2025 budget deficit in line with the approved fiscal framework,” while a separate tranche would refinance the 2018 Eurobond maturing on November 21, 2025 — a step he described as crucial to “avoid default” and align with “international best practices in debt capital markets.”
“The plan is to refinance the maturing Eurobonds through issuance of Eurobonds, bridge finance facility, loan syndication, or direct borrowing from international financial institutions,” he added.
Tinubu further clarified that the combined amount to be raised — $1.229 billion for new borrowing and $1.118 billion for refinancing — brings the total to $2.347 billion, noting that “the terms and conditions can only be determined at the time of the transactions and will be subject to prevailing market conditions.”
He assured lawmakers that the Federal Ministry of Finance and the Debt Management Office (DMO) would “collaborate with transaction advisers to secure the most favourable terms.”
In a related request, which has now been approved, Tinubu sought the House’s endorsement for a stand-alone debut Sovereign Sukuk of up to $500 million — marking Nigeria’s first-ever international issuance of an Islamic bond.
Tinubu said the planned Sukuk would mirror domestic issuances that have already raised “over N1.39 trillion since 2017 for road and infrastructure development.”
According to him, the debut international Sukuk aims to “diversify Nigeria’s investor base, open new funding sources, and deepen the sovereign securities market.”
This approval comes amid concerns over Nigeria’s debt profile.