- Safiu Kehinde
The House of Representatives has approved President Bola Tinubu’s $2.35 billion external loan request to help finance part of Nigeria’s 2025 budget deficit.
Also approved by the green chamber during its plenary session on Wednesday was the issuance of a $500 million sovereign sukuk in the international market.
This was reportedly aimed at supporting infrastructure development and diversify government funding sources.
The approvals followed the adoption of a report by the House Committee on Aids, Loans and Debt Management.
In line with the 2025 Appropriation Act, the House endorsed the implementation of N1.84 trillion (about $1.23 billion) in new external borrowing at a budget exchange rate of N1,500/$1, to partly fund the projected N9.28 trillion federal deficit.
Recall that Tinubu had earlier written to the National Assembly requesting approval, citing Sections 21(1) and 27(1) of the Debt Management Office Act, which require legislative consent for external borrowing.
According to reports, the President stated that the loans may be raised through Eurobonds, syndicated loans, or bridge financing, depending on market conditions.
He noted that interest rates would likely align with current yields on Nigeria’s existing international bonds, which range from 6.8% to 9.3%.
On the $500 million international sukuk, Tinubu explained that it would attract new investor groups, deepen Nigeria’s securities market, and fund critical infrastructure.
He added that Nigeria has already raised over N1.39 trillion through domestic sukuk issuances since 2017 for major road and capital projects, and the international sukuk would complement these efforts.
Up to 25% of the funds may be used to refinance existing high-cost debt. The approvals clear the way for the Federal Government to proceed with the financing plans.