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The House of Representatives has approved President Bola Tinubu’s request to secure a $2.35 billion loan to cover part of the 2025 budget deficit.
It also endorsed the President’s proposal to issue a $500 million debut sovereign sukuk in the international capital market to support infrastructure development and diversify Nigeria’s financing sources.
This approval came on Wednesday, following the adoption of the report presented by the Committee on Aids, Loans, and Debt Management.
The House sanctioned the implementation of new external borrowing amounting to N1,843,669,786,987.16 (equivalent to $1,229,113,000.00) at the budget exchange rate of $1/N1,500, as provided for in the 2025 Appropriation Act, to partly fund the total budget deficit of N9,276,348,934,935.79.
Earlier in October, President Tinubu had written to the National Assembly seeking approval for the external loan, explaining that the request was in line with Sections 21(1) and 27(1) of the Debt Management Office (Establishment) Act, 2003, which require parliamentary consent for new borrowings and refinancing.
Tinubu said the funds would be raised through one or a combination of financial instruments such as eurobonds, syndicated loans, or bridge financing facilities, depending on market conditions at the time of issuance.
He stated that the pricing of the proposed eurobonds was expected to align with yields on Nigeria’s current international bonds, which range from 6.8 per cent to 9.3 per cent depending on maturity periods.
On the proposed $500 million sovereign sukuk, the President explained that it was designed to attract a wider pool of investors and further develop Nigeria’s securities market.
According to him, proceeds from the sukuk would be channelled towards key infrastructure projects across the country.
He further noted that the federal government had successfully raised over N1.39 trillion through domestic sukuk issuances between 2017 and 2025 to fund major road and infrastructure projects, adding that the planned external sukuk would complement the domestic programme.
“It is imperative to open new sources of funding for the federal government and to deepen the FGN securities market.
The proposal is for the House of Representatives to approve the issuance of a stand-alone debut Sovereign Sukuk with or without credit enhancement (Guarantee) from the Islamic Corporation for the Insurance of Investment and Export Credit, ICIEC, a member of the Islamic Development Bank, IsDB, Group,” Tinubu said in the letter to the National Assembly.
The President disclosed that 25 per cent of the sukuk proceeds could be used to refinance high-interest debts, while the remainder would go into infrastructure financing.
The borrowing initiative forms part of Tinubu’s broader economic strategy aimed at boosting foreign reserves, stabilising the naira, and improving infrastructure amidst growing debt obligations.
The House’s endorsement marks a crucial milestone in executing the external financing component of the 2025 Appropriation Act.
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