By Atoyebi Nike
President Bola Ahmed Tinubu has asked the House of Representatives to approve external borrowing of approximately $2.3 billion to fund Nigeria’s 2025 budget deficit and refinance maturing Eurobonds, in line with the administration’s fiscal strategy to bridge infrastructure funding gaps and diversify financing sources.
The request, contained in a letter addressed to the House and read by Speaker Abbas Tajudeen during Tuesday’s plenary, detailed a borrowing plan amounting to $2,347,465,000.
This includes $1.2 billion in new external loans to finance the 2025 Appropriation Act and $1.1 billion to refinance upcoming Eurobond maturities.
“There is a need to pull resources from external sources to complement domestic issues to help bridge infrastructure funding gaps. It is imperative to open new sources of funding for the federal government of Nigeria and thereby diversify the investor base as well as deepen the federal government security markets,” the letter read in part.
Tinubu proposed that the funds be raised through a mix of Eurobond issuance, bridge finance from bookrunners, loan syndication, and direct borrowing from international financial institutions.
He also sought legislative approval to issue a stand-alone sovereign debit Sukuk of up to $500 million, with or without a credit enhancement guarantee from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a member of the Islamic Development Bank Group.
“The policy premium for the guarantee proposed by ICIEC is 3.5% of the issue amount per annum. If the credit enhancement from ICIEC is taken from the proposed Sukuk issuance, 25% of the issue proceeds may be used to repair relatively more expensive debt obligations of the federal government, and the balance will be used to finance the development of pre-identified infrastructure projects,” Tinubu wrote.
The borrowing plan reflects the administration’s strategy of blending domestic and foreign financing. Between September 2017 and May 2025, Nigeria raised ₦1.39 trillion through Sukuk bonds in the domestic capital market to fund critical road infrastructure projects.
This request comes on the back of the Senate’s earlier approval of a $21.5 billion external borrowing framework for 2025-2026, aimed at plugging fiscal shortfalls and funding key sectors such as infrastructure, agriculture, health, and education.
