The House of Representatives has approved President Bola Tinubu’s request to secure a $2.35 billion loan to help finance part of the 2025 budget deficit.
The approval was granted during plenary on Tuesday, October 29, following the consideration of a report from the Committee on Aids, Loans, and Debt Management.
In addition, the House also approved the President’s proposal to issue a $500 million debut sovereign sukuk in the international capital market (ICM) to fund critical infrastructure projects and broaden Nigeria’s financing options.
The green chamber endorsed the implementation of a new external borrowing plan amounting to ₦1.84 trillion (approximately $1.23 billion) at the budget exchange rate of ₦1,500 per dollar, as stipulated in the 2025 Appropriation Act. The funds will be used to partly finance the nation’s ₦9.27 trillion budget deficit.
Earlier this month, President Tinubu sought the National Assembly’s approval in line with Sections 21(1) and 27(1) of the Debt Management Office (Establishment) Act, 2003, which mandates legislative consent for new borrowing and refinancing arrangements.
According to the President, the funds will be raised through one or a mix of instruments, including eurobonds, loan syndications, or bridge financing, depending on prevailing market conditions. He noted that the pricing of the new eurobonds would reflect current yields on Nigeria’s existing international bonds, which range between 6.8% and 9.3%, depending on maturity.
On the proposed $500 million sovereign sukuk, Tinubu stated that the initiative aims to diversify Nigeria’s investor base and deepen the government securities market. The proceeds, he said, would be directed toward key infrastructure projects nationwide.
He added that between 2017 and 2025, the federal government raised over ₦1.39 trillion through domestic sukuk issuances to fund major road and infrastructure projects, noting that the planned external sukuk would complement those domestic efforts.
“It is imperative to open new funding channels for the federal government and to deepen the FGN securities market. The proposal seeks the House’s approval for the issuance of a debut sovereign sukuk—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 Group,” the President wrote in his letter.
Tinubu also revealed that up to 25% of the sukuk proceeds could be used to repay high-cost existing debt, while the remaining funds would be allocated to infrastructure development.
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