The House of Representatives has approved President Bola Tinubu’s request to obtain a loan of $2.35 billion to support the financing of the 2025 budget deficit.
The House also approved the President’s proposal to issue a $500 million debut sovereign sukuk in the international capital market, aimed at funding infrastructure projects and broadening Nigeria’s financing options.
The approval followed the consideration of a report presented by the Committee on Aids, Loans, and Debt Management.
The Green Chamber endorsed the implementation of a new external borrowing of N1,843,669,786,987.16 (equivalent to $1,229,113,000.00) at the budget exchange rate of $1.00/N1,500, as stated in the 2025 Appropriation Act, to partially finance the budget deficit of N9,276,348,934,935.79.
Earlier in the month, President Tinubu had sought the National Assembly’s approval for the loan, explaining that the external borrowing was supported by Sections 21(1) and 27(1) of the Debt Management Office (Establishment) Act, 2003, which mandate legislative consent for new borrowing and refinancing plans.
Tinubu stated that the funds would be sourced through one or a combination of financial instruments, such as eurobonds, loan syndications, or bridge financing facilities, depending on prevailing market conditions.
He noted that the federal government expected the pricing of the new eurobonds to align with the yields on Nigeria’s existing international bonds, which currently range between 6.8 per cent and 9.3 per cent, depending on maturity.
Regarding the proposed $500 million sovereign sukuk, Tinubu explained that the initiative would help diversify Nigeria’s investor base and expand the government securities market.
According to him, the funds generated would be used to support the execution of key infrastructure projects across the country.
The President added that the federal government had successfully raised over N1.39 trillion through domestic sukuk issuances between 2017 and 2025 to fund major road and infrastructure projects, noting that the planned external sukuk would serve as a complement to these domestic efforts.
“It is imperative to open new sources of funding for the federal government and to deepen the FGN securities market.
The proposal is for the House of Representatives to approve the issuance of a stand-alone debut sovereign sukuk with or without credit enhancement (Guarantee) from the Islamic Corporation for the Insurance of Investment and Export Credit, ICIEC, a member of the Islamic Development Bank, IsDB, Group,” Tinubu said in the letter to the National Assembly.
The President further stated that 25 per cent of the proceeds from the sukuk could be used to repay high-cost existing debt, while the remaining portion would be directed toward financing infrastructure development.
The borrowing initiative forms part of President Tinubu’s broader fiscal policy aimed at strengthening foreign reserves, stabilising the naira, and funding key infrastructure projects amid growing debt obligations.
The House’s approval represents a significant step towards implementing the external financing segment of the 2025 Appropriation Act.
