Tinubu Seeks Reps. Approval For $2.8bn External Loans To Fund 2025 Budget, Infrastructure

President Bola Tinubu has requested the approval of the House of Representatives to secure over $2.84 billion in external loans to finance the 2025 budget deficit, refinance maturing Eurobonds, and fund critical infrastructure projects.

According to Nigerian Tribune, the president’s appeal was contained in a letter titled “Request for the Resolution of the National Assembly to Implement New External Borrowing in the 2025 Appropriation Act, Refinance Maturity Eurobonds and Issue Debut Sovereign Sukuk in the International Capital Market” (Reference No: PRES/134-1/10/EB/2), dated September 22, 2025. The letter was read on the floor of the House by Speaker Abbas Tajudeen.

According to the letter, the proposed borrowing includes a new external loan of N1.84 trillion (approximately $1.23 billion at an exchange rate of ₦1,500/$1 as provided in the 2025 Appropriation Act) to partially finance the national budget deficit.

To actualise this, President Tinubu urged the lawmakers to pass a resolution authorising the government to raise the sum through any of the following means: issuance of Eurobonds, a Bridge Finance Facility from Bookrunners, loan syndication, or direct borrowing from international financial institutions.

The president also sought approval for the refinancing of maturing Eurobonds worth $1.118 billion, which were issued on November 21, 2018, at an interest rate of 7.625% and are due for maturity on November 21, 2025.

He explained: “The plan is to refinance the maturing Eurobonds through issuance of Eurobonds, a Bridge Finance Facility from Bookrunners, loan syndication, or direct borrowing from international financial institutions, if necessary, to avoid default.

This is a standard practice in debt capital markets, including the ICM. The proposal is for the House of Representatives to issue its resolution authorising the Federal Government to refinance the Eurobonds accordingly.”

Additionally, President Tinubu requested legislative approval to issue a stand-alone debut sovereign Sukuk of up to $500 million in the international capital market, either with or without credit enhancement (guarantee).

He noted that the 2025 Appropriation Act provides for N9.27 trillion in new borrowings to support the budget deficit, of which N1.84 trillion (about $1.23 billion) is earmarked for new external borrowing.

On the indicative terms for raising external capital amounting to $2.34 billion, the president said:

“The aggregate amount proposed to be raised in the ICM, either through issuance of Eurobonds, a Bridge Finance Facility from Bookrunners, loan syndication, direct borrowing from international financial institutions, or a combination of these options for which the House’s resolution is sought, is $2,347,465,000.

Whilst exploring all the options, the plan is to focus on the issuance of Eurobonds. We believe that Nigeria, being a regular issuer of Eurobonds in the ICM, could raise the proposed amount, subject to market conditions.

He further explained that since Eurobond issuance is a market-based transaction, its terms and conditions will be determined at the time of issuance and will be subject to prevailing market realities.

He added that the Federal Ministry of Finance (FMF) and the Debt Management Office (DMO) will collaborate with transaction advisers to secure the most favourable terms.

“It is expected that the pricing of the new Eurobonds will reflect the yields on Nigeria’s Eurobonds trading in the ICM at the time of issuance, while tenors will be guided by investors’ preferences, price, and the DMO’s liability management strategy,” he said.

Highlighting the rationale for the proposed $500 million Sukuk, Tinubu stated that Nigeria had successfully raised N1.39 trillion through domestic Sukuk issuance between September 2017 and May 2025 to fund critical road infrastructure projects. He stressed the need to tap external Sukuk markets to bridge infrastructure funding gaps.

“It is imperative to open new sources of funding for the Federal Government and thereby diversify the investor base as well as deepen the FGN securities market,” the president emphasised.

He also revealed that the proposed Sukuk may be issued with or without credit enhancement from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a member of the Islamic Development Bank (IsDB) Group.
According to him, the policy premium for ICIEC’s guarantee is 3.5% of the issue amount per annum. If the credit enhancement is utilised, 25% of the proceeds will be used to repay more expensive debt obligations, while the remainder will be channelled towards financing pre-identified infrastructure projects.

President Tinubu concluded by urging the House to approve: The raising of $2.34 billion comprising the new external borrowing in the 2025 Appropriation Act ($1.23 billion) and the refinancing of maturing Eurobonds ($1.118 billion) through any of the listed funding options.

The issuance of a stand-alone debut sovereign Sukuk of up to $500 million, with or without ICIEC’s credit enhancement.

The president maintained that these measures are critical to funding the budget deficit, ensuring timely debt servicing, and accelerating infrastructure development across the country.

Source: Informationng