The House of Representatives has approved President Bola Tinubu’s request to borrow $2.35 billion to help finance part of Nigeria’s 2025 budget deficit.
The House, during Wednesday’s plenary also endorsed the President’s plan to issue a $500 million debut sovereign sukuk in the international capital market to fund infrastructure projects and diversify the country’s financing sources.
The approvals followed the consideration and adoption of a report presented by the House Committee on Aids, Loans and Debt Management.
According to the resolution, the chamber approved the implementation of a new external borrowing of N1.84 trillion (equivalent to $1.23 billion) at a budget exchange rate of N1,500 to $1, as provided for in the 2025 Appropriation Act, to partially finance the federal deficit projected at N9.28 trillion.
Earlier this month, President Tinubu wrote to the National Assembly seeking legislative approval for the new external borrowing in line with Sections 21(1) and 27(1) of the Debt Management Office (Establishment) Act, 2003, which require parliamentary consent for such arrangements.
In his request, the President explained that the loans would be raised through one or a combination of instruments, including Eurobonds, loan syndications, or bridge financing facilities, depending on prevailing market conditions.
He said the government expects the pricing of the Eurobonds to align with current yields on Nigeria’s existing international bonds, which range between 6.8 percent and 9.3 percent, depending on maturity.
On the proposed $500 million sovereign sukuk, Tinubu said the issuance would help attract new classes of investors and deepen Nigeria’s government securities market.
He added that proceeds from the sukuk would be deployed to critical infrastructure projects nationwide.
The President noted that Nigeria has raised over N1.39 trillion through domestic sukuk issuances between 2017 and 2025 to fund major road and infrastructure projects. The proposed international sukuk, he said, would complement those domestic efforts.
“It is imperative to open new sources of funding for the federal government and to deepen the FGN securities market,” Tinubu stated in his letter. “The proposal is for the House of Representatives to approve the issuance of a stand-alone debut sovereign sukuk with or without credit enhancement (guarantee) from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a member of the Islamic Development Bank (IsDB) Group.”
He added that up to 25 percent of the sukuk proceeds may be used to repay high-cost existing debt.
