Reps Grant Approval for Tinubu’s Loan to Finance National Budget Deficit

President Bola Ahmed Tinubu’s request to adopt a new external borrowing plan costing ₦1.84 trillion (about $1.23 billion) as recorded in the 2025 Appropriations Act to assist finance the nation’s growing budget deficit has been approved by the House of Representatives.

The House Committee on Aids, Loans and Debt Management, led by Abubakar Hassan Nalaraba, considered and approved a report during a plenary session on Wednesday.

The committee claims that the ₦9.27 trillion deficit in the 2025 fiscal framework will be partially addressed by the additional borrowing.

The House also approved the refinancing of a $1.12 billion Eurobond (7.625% USD1.118 billion due November 2025) in an effort to lessen repayment pressure and stabilize Nigeria’s financial position.

According to the resolution, Nigeria would be able to avoid a debt servicing constraint and lower the risk of volatility in its external commitments by refinancing the maturing Eurobond.

Legislators also approved the federal government’s plan to obtain an extra $2.35 billion through various international financial instruments in addition to the loan and Eurobond refinancing.

These include the issue of Eurobonds, loan syndications, bridge financing arrangements, and other external borrowings from international financial organizations.

The resolution states that this financing window will disperse borrowing risks and offer flexibility for government finance needs.

The House also approved the issuance of a $500 million debut stand-alone Sovereign Sukuk on the global capital market in an effort to diversify Nigeria’s debt instruments and draw in Islamic-compliant investors.

The lawmakers clarified that in order to boost competition and guarantee investor confidence, the Sukuk may be issued with or without credit enhancement.

In addition to its domestic Sukuk program, which has been utilized to finance infrastructure and road projects, this is Nigeria’s first independent sovereign Sukuk on the global market.

The House resolution states that the new borrowing plan is consistent with President Tinubu’s fiscal strategy, which aims to:

bolstering Nigeria’s foreign reserves, keeping the currency stable, financing vital infrastructure projects, and controlling the nation’s mounting debt commitments.
The strategy, according to lawmakers, was intended to ease financial strain on the government, draw in a variety of investment sources, and guarantee a long-term equilibrium between debt repayment and national advancement.

According to reports, Nigeria’s overall public debt has been rising, and experts have cautioned about the nation’s growing reliance on foreign borrowing to cover budget deficits.

The plan’s proponents, however, maintain that borrowing is still required to finance capital projects, promote growth, and reassure investors of Nigeria’s fiscal stability.

The House resolution emphasized the importance of prudent debt management and openness in the use of borrowed money.