President Tinubu Seeks Approval for Major External Borrowing
President Bola Tinubu has formally requested the House of Representatives to approve a significant amount of external loans to address the 2025 budget deficit and support infrastructure development. The request, detailed in a letter dated 22nd September 2025, outlines plans to raise over $2,847,465,000 through various financial instruments.
The letter, titled “Request for the Resolution of the National Assembly to Implement New External Borrowing in the 2025 Appropriation Act, Refinance Maturity Eurobonds and Issue Debut Sovereign SUKUK in the International Capital Market,” was read on the floor by Speaker Abbas Tajudeen. It includes a breakdown of the proposed loan, which comprises new external borrowing of N1,843,669,786,987.16 (equivalent to USD1,229,113,000 at an exchange rate of USD1.00/N1,500).
To achieve this, the President urged the House to issue a resolution allowing the government to raise the funds through several options, including:
- Issuance of Eurobonds
- Bridge Finance Facility from Bookrunners
- Loan syndication
- Direct borrowing from international financial institutions
This approach aims to ensure that the government can meet its financial obligations without defaulting on existing debts.
Refinancing Maturing Eurobonds
In addition to new borrowing, the plan includes refinancing maturing Eurobonds worth $1,118,352,000 (7.625%), which were issued in November 2018 and will mature in November 2025. The President emphasized that refinancing is a standard practice in debt capital markets and suggested that the House of Representatives should authorize the Federal Government to refinance these bonds through similar methods as outlined above.
He stated: “The proposal is for the House of Representatives to issue its Resolution authorising the FGN to refinance the Eurobonds accordingly.”
Introduction of Sovereign Sukuk
Another key component of the request involves the issuance of a stand-alone debut sovereign Sukuk of up to $500 million in the international capital market. This move is intended to diversify funding sources and deepen the securities market.
The President highlighted the success of previous Sukuk issuances in the domestic market, where the Debt Management Office (DMO) raised N1,392.557 trillion between September 2017 and May 2025. He noted that external Sukuk issuance would complement these efforts and help bridge infrastructure funding gaps.
The proposed Sukuk may include credit enhancement from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a member of the Islamic Development Bank (IsDB) Group. The policy premium for the guarantee is 3.5% of the issue amount per annum. If credit enhancement is used, 25% of the proceeds could be allocated to repay more expensive debt obligations, with the remaining funds used for infrastructure projects.
Indicative Terms and Conditions
The President also provided indicative terms and conditions for the external capital raising of USD2,347,465,000. He emphasized that while the exact terms will depend on market conditions, the focus will be on issuing Eurobonds, given Nigeria’s experience in this area.
He added: “The Federal Ministry of Finance (FMF) and the Debt Management Office (DMO) will work with the transaction advisers to secure the most favourable terms and conditions. The indicative terms and conditions for issuance of USD2.347 billion Eurobonds in the ICM are attached as Annexure 1.”
Additionally, he mentioned that the pricing of the new Eurobonds will reflect the yields on Nigeria’s Eurobonds trading in the ICM at the time of issuance, with tenors guided by investor preferences and liability management strategy.
Final Request to the House of Representatives
In conclusion, President Tinubu respectfully requested the House of Representatives to pass a resolution authorizing:
- The raising of external capital in the sum of USD2,347,465,000.00, comprising new external borrowing in the 2025 Appropriation Act (USD1,229,113,000.00) and refinancing of maturing Eurobonds (USD1,118,352,000.00), through any of the following option(s): issuance of Eurobonds, Bridge Finance Facility from Bookrunners, loan syndication, and direct borrowing from international financial institutions.
- The issuance of a debut stand-alone sovereign Sukuk of up to USD500 million, with or without credit enhancement from the Islamic Corporation for the Insurance of Investment and Export Credit.
