Tinubu Seeks National Assembly’s Approval for $2.3bn Foreign Loan and $500m Sovereign Sukuk

President Bola Ahmed Tinubu has sought the approval of the House of Representatives for new external borrowing and debt refinancing totalling $2.3 billion, as well as the issuance of a $500 million sovereign Sukuk in the international capital market.

The request, contained in a letter read by Speaker Tajudeen Abbas during Tuesday’s plenary, was made pursuant to Sections 21(1) and 27(1) of the Debt Management Office (DMO) Establishment Act, 2003, which requires National Assembly approval for such borrowings.

According to the President, the borrowing plan is designed to support the implementation of the 2025 Appropriation Act, refinance maturing Eurobonds, and diversify Nigeria’s funding sources through Islamic finance instruments.

Tinubu explained that the 2025 budget provides for $9.27 billion in new borrowings to finance the fiscal deficit, with $1.84 billion (₦1.23 trillion) of that amount allocated for external loans based on an exchange rate of ₦1,500 to the dollar.

He urged lawmakers to authorise the Federal Government to raise the funds through options including the issuance of Eurobonds, loan syndication, bridge financing, or direct borrowing from international financial institutions.

The President also noted that Nigeria’s $1.118 billion Eurobond, issued in 2018 at 7.625% and maturing in November 2025, would be refinanced to prevent default.

“This is standard practice in debt capital markets,” the letter stated. “Refinancing through Eurobonds or syndicated loans will ensure debt sustainability and preserve investor confidence.”

In a related development, Tinubu sought legislative approval to issue a standalone $500 million sovereign Sukuk in the international market — with or without a credit guarantee from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a member of the Islamic Development Bank Group.

He explained that the request was inspired by the success of Nigeria’s domestic Sukuk programme, which has raised ₦1.39 trillion since 2017 for key infrastructure projects, especially in the road sector.

According to the President, proceeds from the proposed international Sukuk would be channelled towards infrastructure financing and debt reduction. “If the ICIEC credit guarantee is utilised, 25% of the proceeds will go toward repaying expensive debt obligations, while the balance will fund pre-identified infrastructure projects,” he stated.

Tinubu assured lawmakers that the Federal Ministry of Finance and the DMO would work with transaction advisers to secure favourable terms and pricing, taking into account market conditions.

“Nigeria remains a regular and reputable issuer in the international capital markets,” the President said, expressing confidence in the country’s capacity to raise the proposed funds.

He concluded by urging the House to pass a resolution authorising the Federal Government to:

1. Raise $2.347 billion through Eurobonds, syndicated loans, or bridge financing;
2. Refinance the $1.118 billion Eurobond maturing in November 2025; and
3. Issue a $500 million sovereign Sukuk, with possible ICIEC credit enhancement.

“I look forward to the timely issuance of the House’s resolution,” Tinubu wrote, reaffirming his commitment to prudent fiscal management and sustainable debt practices.

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