Nigerian Economist Sees No Cause for Alarm Over President Tinubu’s Domestic Loan Request

The Managing Director and Chief Executive Officer of Financial Derivatives Company Limited, Bismarck Rewane, has downplayed concerns over President Bola Tinubu’s recent request for a fresh 1.15 trillion domestic loan to finance the 2025 budget deficit. According to Rewane, the loan approval being sought from the National Assembly is merely a formality to ratify existing budget provisions.

Appearing on Channels Television’s Business Morning program, Rewane explained that the increased revenue resulting from the Federal Government’s suspension of subsidies will facilitate timely debt repayment. He emphasized that the requested loan is not an additional debt, but rather a ratification of the budget’s financing, which includes issuing bonds and other financial instruments.

The 2025 budget has a deficit of approximately 13-14 trillion, out of a total budget of over 54 trillion. President Tinubu’s request aims to bridge this funding gap and ensure the full implementation of government programs and projects. The proposed borrowing is intended to provide the necessary funds to support the 2025 fiscal plan.

The President’s request was conveyed to the National Assembly in a letter read on the Senate floor, which has since been referred to the Senate Committee on Local and Foreign Debt for review. The committee is expected to report back within one week, paving the way for further legislative action.

Rewane’s assessment suggests that the loan request is a standard procedure to secure funding for the budget, rather than a cause for concern. With the increased revenue from the subsidy suspension, the economist believes that debt repayment will not be a problem. As the National Assembly considers the President’s request, the outcome will be closely watched to determine the next steps in addressing the 2025 budget deficit.