The House of Representatives has approved President Bola Tinubu’s request to borrow $2.35 billion to finance part of the 2025 budget deficit.
It also granted the President’s request to issue a $500 million debut sovereign sukuk in the international capital market to fund infrastructure projects and diversify Nigeria’s financing sources. The president’s approval came yesterday after the committee on aids, loans, and debt management’s report was considered.
The green chamber approved the implementation of 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 as new external borrowing in the 2025 Appropriation Act, to part-finance the budget deficit of N9,276,348,934,935.79.
Early this month, the president sought the approval of the National Assembly, stating that the external borrowing was backed by provisions of Sections 21(1) and 27(1) of the Debt Management Office (Establishment) Act, 2003, which require legislative approval for new loans and refinancing arrangements.
Tinubu said the funds would be raised through one or a combination of instruments such as eurobonds, loan syndications, or bridge financing facilities, depending on prevailing market conditions. He said the federal government expected the pricing of the new eurobonds to align with current yields on Nigeria’s existing bonds in the international market, ranging between 6.8 per cent and 9.3 per cent, depending on maturity.
On the proposed $500 million sovereign sukuk, Tinubu said the move would help diversify Nigeria’s investor base and deepen the government securities market. According to him, the proceeds will support the development of critical infrastructure projects across the country.
