Ayomide Awe
The Senate has received a fresh request from President Bola Tinubu seeking approval to raise N10.79tn, equivalent to approximately $7.7bn, through external borrowing to finance part of the 2026 budget deficit.
The request, contained in a letter read by Senate President Godswill Akpabio during plenary, seeks legislative authorisation for the Federal Government to implement the external borrowing component of the 2026 Appropriation Act.
Tinubu said the proposed borrowing was part of the N29.2tn new borrowing provision in the 2026 budget to finance a projected deficit of about N31.4tn.
According to the President, the borrowing plan comprises N18.4tn in domestic loans and N10.79tn in external financing, with the latest request specifically seeking approval for the foreign component.
The letter, as reported by the News Agency of Nigeria, was submitted pursuant to Sections 21(1) and 27(1) of the Debt Management Office Establishment Act, 2003.
Tinubu explained that the Federal Government intended to raise approximately $7.7bn through one or a combination of funding sources, including concessional and commercial loans from multilateral and bilateral institutions, the International Monetary Fund, bridge financing facilities, direct borrowing from international financial institutions and Eurobond issuance.
He said the government would explore the available options simultaneously, taking into consideration their respective costs, benefits and the time required to secure the funds.
However, the President indicated that greater reliance would be placed on Eurobond issuance, which he said was generally faster to conclude and could generate larger amounts at relatively competitive costs.
He added that the final borrowing conditions, including interest rates and repayment tenures, would be determined by prevailing market conditions at the time the funds were raised.
Tinubu assured the lawmakers that the Federal Ministry of Finance and the Debt Management Office would work towards securing the most favourable terms for the country.
Explaining the intended utilisation of the funds, the President said the proposed external borrowing would finance priority projects in defence and security, transportation, agriculture, power, education and healthcare.
He further stated that the proceeds would be received by the Central Bank of Nigeria on behalf of the Federal Government and would also support the country’s external reserves.
The President consequently asked the National Assembly to authorise the government to raise the N10.79tn, calculated at the budget exchange rate of N1,409 to the dollar, through one or more of the identified funding sources, with greater emphasis on Eurobond issuance.
He also sought the lawmakers’ approval for the Minister of Finance and Coordinating Minister of the Economy, in collaboration with the Debt Management Office, to take all necessary steps to implement the proposed borrowing.
Reacting to the correspondence, Akpabio said the latest request superseded an earlier proposal seeking approval for $20.3bn in external borrowing, describing the new communication as more explicit.
The Senate President said the government would explore different funding windows to obtain the most favourable borrowing conditions through a willing-seller, willing-buyer arrangement.
Following the presentation, Akpabio referred the request to the Senate Committee on Local and Foreign Debt for consideration and a report to the Senate as soon as practicable.
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