The House of Representatives has approved President Bola Tinubu’s request to borrow $2.35 billion to finance part of Nigeria’s 2025 budget deficit.
The lawmakers, during Wednesday’s plenary, also endorsed the President’s plan to issue a $500 million debut sovereign sukuk in the international capital market to fund infrastructure projects and diversify the country’s financing sources.
The approvals followed the consideration and adoption of a report by the House Committee on Aids, Loans and Debt Management.
According to the resolution, the chamber approved the implementation of a new external borrowing of N1.84 trillion (equivalent to $1.23 billion) at a budget exchange rate of N1,500 to $1, as provided in the 2025 Appropriation Act. The borrowing will partially finance the federal deficit projected at N9.28 trillion.
Earlier this month, President Tinubu wrote to the National Assembly seeking legislative approval for the new external loans in line with Sections 21(1) and 27(1) of the Debt Management Office (Establishment) Act, 2003, which requires parliamentary consent for such arrangements.
In his request, the President explained that the loans would be raised through one or a combination of instruments, including Eurobonds, loan syndications, or bridge financing, depending on market conditions.
He said the pricing of the Eurobonds would align with current yields on Nigeria’s existing international bonds, which range between 6.8 percent and 9.3 percent, depending on maturity.
On the proposed $500 million sovereign sukuk, Tinubu stated that the issuance would attract new classes of investors and deepen Nigeria’s government securities market. Proceeds, he added, would be channeled into critical infrastructure projects nationwide.
Between 2017 and 2025, Nigeria has raised over N1.39 trillion through domestic sukuk issuances to fund major road and infrastructure projects. The proposed international sukuk, according to the President, will complement those domestic efforts and expand funding sources for the federal government.
He also noted that up to 25 percent of the sukuk proceeds may be used to refinance high-cost existing debts.