The Nigerian National Assembly has given its approval for President Bola Tinubu’s request to secure $2.347 billion from the international capital market. The funds will be used to partially finance the 2025 budget deficit and refinance maturing Eurobonds. Additionally, the assembly has granted approval for a $500 million debut sovereign sukuk to be issued in the international capital market, which will be utilized to fund infrastructure projects and diversify Nigeria’s financing sources.
The approval was granted after the House of Representatives adopted a report presented by the House Committee on Aids, Loans, and Debt Management, chaired by Hon. Abubakar Hassan Nalaraba. The report was presented during a plenary session presided over by Speaker Tajudeen Abbas. The committee’s report considered the provisions of the 2025 Appropriation Act, which includes 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.
President Tinubu had requested the loan, citing the need to part-finance the budget deficit of N9,276,348,934,935.79. He stated that the external borrowing is 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. The funds will be raised through a combination of instruments such as Eurobonds, loan syndications, or bridge financing facilities, depending on prevailing market conditions.
The approval of the loan request is significant, as it will enable the Nigerian government to access much-needed funds to finance its budget deficit and refinance maturing debts. The issuance of a debut sovereign sukuk will also provide an opportunity for the country to diversify its financing sources and attract investment from the international market. The next steps will involve the implementation of the new external borrowing and the issuance of the sukuk, which are expected to have a positive impact on Nigeria’s economy.