The Nigerian House of Representatives has officially approved President Bola Ahmed Tinubu’s request to raise a total of $2.35 billion from the international capital market. This significant external borrowing is intended to partially finance the 2025 budget deficit and to refinance Nigeria’s maturing Eurobonds. The decision was reached during a plenary session, presided over by Speaker Tajudeen Abbas, following the consideration and adoption of a report submitted by the House Committee on Aids, Loans, and Debt Management, chaired by Hon. Abubakar Hassan Nalaraba.

The approved borrowing plan specifies that $1.23 billion will be allocated to fund the 2025 budget deficit, while the remaining $1.12 billion is designated for refinancing Eurobonds that are set to mature in November 2025. The Committee’s recommendations, which the House endorsed, authorize the Federal Government to proceed with the external borrowing component of the 2025 Appropriation Act, amounting to N1.84 trillion (equivalent to approximately $1.23 billion) at the budget exchange rate of N1,500 to a dollar. The funds are expected to be accessed through various financial instruments, including Eurobond issuance, loan syndication, bridge finance facilities, or direct borrowing from international financial institutions, depending on prevailing market conditions.

In addition to the main borrowing, lawmakers also granted approval for President Tinubu’s proposal to issue Nigeria’s first-ever Sovereign Sukuk of up to $500 million in the international capital market. This debut sovereign sukuk aims to fund infrastructure projects, diversify Nigeria’s financing sources, and deepen the government securities market. The President indicated that 25 percent of the proceeds from the sukuk might be utilized to repay existing high-cost debts, with the balance channeled into critical infrastructure development across the country. The issuance may proceed 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 (IsDB) Group.

President Tinubu had earlier explained in his communication to the National Assembly that the borrowing plan was imperative to bridge the gap between projected revenue and planned expenditure for the 2025 fiscal year, ensuring the government’s ability to meet its obligations as existing debts mature. He emphasized that the external borrowing is backed by the provisions of sections 21(1) and 27(1) of the Debt Management Office (Establishment) Act, 2003, which mandate legislative approval for new loans and refinancing arrangements. The Federal Government anticipates that the pricing for new Eurobonds will align with current yields on Nigeria’s existing bonds in the international market, which typically range between 6.8 percent and 9.3 percent, depending on maturity.