President Bola Tinubu has requested the approval of the Senate for a fresh N1.15 trillion domestic loan to help finance the deficit in the 2025 budget.
The request was contained in a letter addressed to Senate President Godswill Akpabio and read during plenary on Tuesday.
According to the president, the proposed borrowing is designed to bridge the government’s funding gap and ensure the full implementation of critical programs and projects outlined in the 2025 fiscal plan.
Tinubu emphasized that the domestic borrowing would form part of the administration’s broader fiscal strategy to stimulate economic growth, enhance infrastructure investment, and strengthen social programs aimed at improving citizens’ welfare.
After reading the letter, Akpabio referred the request to the Senate Committee on Local and Foreign Debt for further legislative review and recommendations.
The committee is expected to submit its report to the Senate within one week, after which lawmakers will deliberate on whether to grant the president’s request.
The proposed borrowing aligns with the federal government’s fiscal framework, which projects a combination of domestic and external financing to cover revenue shortfalls and sustain ongoing development projects across key sectors.
Last month, the House of Representatives approved President Bola Tinubu’s request to borrow $2.35 billion to help finance part of the 2025 budget deficit.
In addition, the green chamber endorsed the President’s proposal to issue a $500 million debut sovereign sukuk in the international capital market (ICM) to support key infrastructure projects and diversify Nigeria’s financing sources.
The approvals followed the consideration and adoption of the report of the House Committee on Aids, Loans, and Debt Management, which reviewed the borrowing plan and recommended its implementation.
The Debt Management Office (DMO) successfully raised N1.39 trillion through the issuance of Sukuk bonds in the domestic capital market, which have been channelled toward the construction and rehabilitation of major roads and bridges nationwide.
President Tinubu’s fresh request for a N1.15 trillion domestic loan signals a continued reliance on borrowing to fund Nigeria’s budget deficit amid persistent revenue shortfalls.
While the borrowing is aimed at sustaining economic growth and financing key infrastructure and social programs, it also raises fresh concerns about the country’s rising debt profile and future repayment capacity.
On the positive side, domestic borrowing tends to reduce foreign exchange exposure and currency risks, since repayments are made in naira rather than foreign currencies. It also deepens the local capital market and can provide liquidity for institutional investors.