The House of Representatives has approved President Bola Tinubu’s request to borrow $2.35 billion to help finance part of Nigeria’s 2025 budget deficit. Lawmakers also endorsed the President’s proposal to issue a $500 million debut sovereign sukuk in the international capital market to support infrastructure projects and expand the country’s funding sources.
The approval followed the adoption of the report by the House Committee on Aids, Loans, and Debt Management during plenary on Tuesday. The lawmakers also gave the green light for the implementation of a new external borrowing of ₦1.84 trillion (about $1.23 billion) at the exchange rate of ₦1,500 to the dollar, as provided for in the 2025 Appropriation Act. The funds are expected to partly cover the federal government’s projected budget deficit of ₦9.28 trillion.
In his earlier request to the National Assembly, President Tinubu explained that the borrowing plan is in line with Sections 21(1) and 27(1) of the Debt Management Office (Establishment) Act, 2003, which mandates legislative approval for new external loans. He noted that the government intends to raise the funds through various financing instruments, including Eurobonds, syndicated loans, or bridge facilities, depending on market conditions.
Tinubu added that the pricing of the Eurobonds would align with the current yields on Nigeria’s existing international bonds, which range between 6.8 percent and 9.3 percent, depending on the maturity period. He emphasized that the loans would help the government strengthen foreign reserves, stabilize the naira, and fund critical infrastructure projects.
The President also highlighted that the proposed $500 million sovereign sukuk would deepen Nigeria’s investor base and diversify its funding channels. He explained that while up to 25 percent of the sukuk proceeds might be used to refinance high-cost existing debts, the bulk of the funds would be directed toward key infrastructure development projects nationwide.
Tinubu pointed out that between 2017 and 2025, the federal government successfully raised over ₦1.39 trillion through domestic sukuk issuances to finance major road and infrastructure projects. The international sukuk, he said, will complement these domestic efforts and mark Nigeria’s entry into the global Islamic finance market.
According to reports from Reuters and BusinessDay, Nigeria’s debut international sukuk is part of a broader strategy to attract new investors from Islamic finance markets while reducing reliance on conventional loans. The plan also seeks to ease pressure on domestic borrowing and create more stable long-term funding for capital projects.
