President Bola Ahmed Tinubu has requested the approval of the House of Representatives for new external borrowing and debt refinancing totalling $2.3 billion, along with the issuance of a $500 million debut sovereign Sukuk in the international capital market.
The request was contained in a letter read on the floor of the House by Speaker Tajudeen Abbas on Tuesday.
According to the letter, the president’s request aligns with Sections 21(1) and 27(1) of the Debt Management Office (DMO) Establishment Act, 2003, and seeks legislative backing for the new borrowing plan.
Tinubu explained that the proposed borrowing is aimed at implementing the 2025 Appropriation Act, refinancing maturing Eurobonds, and diversifying Nigeria’s funding sources through Islamic finance instruments.
He noted that the 2025 budget provides for $9.27 billion in total new borrowings to finance the fiscal deficit, with $1.84 billion (N1.23 trillion) allocated for external loans at an exchange rate of N1,500/$.
The president urged lawmakers to authorise the Federal Government to raise the funds through any of the following channels:
- Issuance of Eurobonds,
- Loan syndication,
- Bridge financing from book runners, or
- Direct borrowing from international financial institutions.
Tinubu also disclosed plans to refinance Nigeria’s $1.118 billion Eurobond, issued in 2018 at 7.625% and due in November 2025, to prevent default and maintain investor confidence.
He explained that refinancing through Eurobonds or syndicated loans is a standard debt management strategy that supports fiscal sustainability.
Highlighting Nigeria’s success with domestic Sukuk issuances, which have raised N1.39 trillion since 2017 for key infrastructure projects, Tinubu said the proposed international Sukuk would help bridge the nation’s infrastructure gap and attract a broader range of investors.
“If the ICIEC credit guarantee is utilised, 25% of the proceeds will go toward repaying costly debt obligations, while the balance will fund pre-identified infrastructure projects,” the letter stated.
The president assured lawmakers that the Federal Ministry of Finance and the Debt Management Office (DMO) would collaborate with transaction advisers to secure the most favourable terms and pricing for all capital-raising efforts, in line with prevailing market conditions.