Tinubu Gets Reps’ Nod for $2.35bn Loan, $500m Sukuk Issuance

The House of Representatives has approved President Bola Tinubu’s request to borrow $2.35 billion to finance part of Nigeria’s 2025 budget deficit.

Lawmakers also granted approval for the issuance of 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 during plenary on Tuesday.

According to the committee’s report, the green chamber endorsed the implementation of new external borrowing amounting to ₦1.84 trillion (approximately $1.23 billion) at the budget exchange rate of $1/N1,500. The funds form part of the 2025 Appropriation Act, which includes a total budget deficit of ₦9.27 trillion.

Earlier in the month, President Tinubu had written to the National Assembly seeking legislative approval, citing provisions of Sections 21(1) and 27(1) of the Debt Management Office (Establishment) Act, 2003, which mandate parliamentary consent for new external loans and refinancing arrangements.

The president explained that the new funds would be raised through one or a combination of instruments — eurobonds, loan syndications, or bridge financing facilities — depending on prevailing market conditions.

Tinubu noted that the pricing of the new eurobonds would reflect current yields on Nigeria’s outstanding international bonds, which range between 6.8% and 9.3%, depending on maturity.

On the proposed $500 million sovereign sukuk, the president said the initiative aims to broaden Nigeria’s investor base and deepen the government securities market, adding that proceeds would be used to finance critical infrastructure projects nationwide.

He further disclosed that the federal government had already raised over ₦1.39 trillion through domestic sukuk issuances between 2017 and 2025, which have funded several key road and infrastructure developments.

“It is imperative to open new sources of funding for the Federal Government and deepen the FGN securities market,” Tinubu stated in his letter to the National Assembly.

“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.

The president also noted that 25% of the sukuk proceeds could be used to repay high-cost existing debt, while the remainder would be channeled toward infrastructure financing.

The borrowing plan, he explained, aligns with his administration’s fiscal strategy to strengthen foreign reserves, stabilise the naira, and fund critical national projects, amid Nigeria’s growing debt obligations.

With the House’s approval, the government can now proceed with the external financing component of the 2025 Appropriation Act.

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