The House of Representatives has given its approval for President Bola Tinubu’s request to secure a $2.35 billion external loan to finance part of Nigeria’s 2025 budget deficit. The green chamber also endorsed the President’s plan to issue a $500 million debut sovereign sukuk in the international capital market (ICM) to support major infrastructure projects and diversify the nation’s funding sources.

The resolutions were reached on Wednesday following the consideration and adoption of the report by the House Committee on Aids, Loans, and Debt Management, which reviewed the borrowing plan and recommended its implementation.

According to the committee’s report, the new borrowing amounting to ₦1.84 trillion (approximately $1.229 billion at the budget exchange rate of ₦1,500 to $1) will help cover part of the ₦9.28 trillion deficit in the 2025 Appropriation Act.

Tinubu’s Request: A Push for Fiscal Sustainability

Earlier in October, Akahi News gathered that President Tinubu had written to the House of Representatives seeking approval for the Federal Government’s plan to raise $2.3 billion in external capital for the 2025 fiscal year.

In the letter read by Speaker Hon. Abbas Tajudeen, the President explained that the funds would be raised through a mix of financial instruments, including Eurobonds, bridge financing facilities, syndicated loans, and direct borrowings from international financial institutions.

“The Federal Government has recorded considerable success in the issuance of Sukuk in the domestic capital market for the development of critical infrastructural projects across the country,” Tinubu stated, highlighting the administration’s intention to extend the model internationally.

Broader Borrowing Framework and Debt Profile

In July, the Senate had already approved the $21.5 billion 2025–2026 external borrowing plan presented by President Tinubu, alongside a ₦757 billion Federal Government Bond to clear accrued pension rights under the Contributory Pension Scheme (CPS) as of December 2023.

Akahi News learnt that Nigeria’s total public debt stood at ₦149.39 trillion as of March 31, 2025 — representing a 22.8% year-on-year increase from ₦121.67 trillion in the same period of 2024.

The rising debt levels have sparked conversations among economists and policy analysts about the long-term sustainability of Nigeria’s fiscal strategy. However, government officials maintain that borrowing remains essential to bridge infrastructure gaps and stimulate growth, provided funds are channelled into productive sectors.

Sukuk Success and Ongoing Partnerships

The Debt Management Office (DMO) has continued to leverage Sukuk bonds to fund major infrastructure works. Recently, the agency raised ₦1.39 trillion through domestic Sukuk issuances, which were deployed to road and bridge rehabilitation across the country.

Meanwhile, Nigeria is also reportedly in talks with China’s Export-Import Bank for a $2 billion loan to finance a new “super grid” project aimed at addressing the country’s persistent power shortages and boosting industrial productivity.

The Road Ahead

Analysts believe the fresh loans, if effectively managed, could provide a fiscal cushion to support infrastructure delivery and drive economic recovery. However, they caution that the government must maintain a delicate balance between financing development and managing debt obligations to avoid future fiscal stress.

As the Federal Government proceeds with its 2025 financing plan, all eyes will be on how efficiently the borrowed funds are utilised to achieve tangible development outcomes for Nigerians.

By Joseph Iyaji | Akahi News
Joseph Iyaji is a journalist, educator, and founder of Akahi G. International, Akahi Tutors, and Akahi News. Read more about him here.
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