***New borrowing request targets 2026 budget deficit, replaces earlier proposal, says Akpabio
President Bola Tinubu has approached the National Assembly for approval to raise $7.7 billion (₦10.79 trillion) in external loans to finance projects captured in the 2026 Appropriation Act, replacing an earlier borrowing proposal of more than $20 billion.
The revised request, which signals a significant reduction in the proposed external borrowing, was contained in a letter read by Senate President Godswill Akpabio during plenary on Wednesday.
Akpabio disclosed that the latest communication effectively supersedes the earlier request, describing it as more explicit in outlining the government’s borrowing plans.
In the letter, Tinubu explained that the proposed $7.7 billion represents the external borrowing component of the ₦29.2 trillion borrowing provision in the 2026 budget.
The total borrowing provision comprises ₦18.4 trillion in domestic loans and ₦10.79 trillion in external financing.
The President said the funds would help bridge the budget deficit and finance critical projects in defence and security, transportation, agriculture, power, education and healthcare.
He also argued that the borrowing would strengthen Nigeria’s external reserves and provide support for the naira, adding that the proceeds would be received by the Central Bank of Nigeria on behalf of the Federal Government.
Eurobonds take centre stage
Tinubu listed several financing options the government intends to explore, including loans from multilateral and bilateral institutions, the International Monetary Fund, bridge financing facilities and Eurobond issuance.
However, he directed that greater attention be given to Eurobonds, which he said could provide access to larger amounts of funds within a shorter period and at relatively lower costs.
He acknowledged that the final interest rates and repayment timelines would depend on prevailing market conditions when the loans are negotiated.
The President assured lawmakers that the Ministry of Finance and the Debt Management Office would work to secure the most favourable terms for the country.
Senate begins consideration
Tinubu based the request on Sections 21(1) and 27(1) of the Debt Management Office Act 2003, which provide the legal framework for external borrowing and legislative approval.
Section 21(1) specifically requires the terms and conditions of proposed external loans to be presented to the National Assembly for approval before they can be obtained by the Minister of Finance.
Akpabio explained that the proposed borrowing would be sourced from different financing channels, rather than a single lender, to enable the government to secure the most favourable terms.
He subsequently referred the request to the Senate Committee on Local and Foreign Debts for further legislative consideration and directed the committee to report back as soon as practicable.