President Bola Tinubu has asked the National Assembly to approve a fresh external borrowing plan worth approximately $7.7 billion to finance part of Nigeria’s 2026 budget deficit, in a move the Senate President, Godswill Akpabio, says effectively replaces an earlier $20.3 billion borrowing proposal.
The request was conveyed in a letter dated October 26, 2026, which Akpabio read during Wednesday’s Senate plenary.
Under the proposal, the Federal Government wants approval to borrow N10.79 trillion from external sources. The amount is equivalent to about $7.7 billion, using the budget exchange rate of N1,409 to the dollar.
Tinubu said the request was submitted in accordance with Sections 21(1) and 27(1) of the Debt Management Office (DMO) Establishment Act, 2003. These provisions require the government to obtain legislative approval before securing external loans and allow the National Assembly to endorse the terms governing such borrowing.
The fresh request forms part of the financing arrangement for the 2026 budget, which has an approved borrowing provision of N29.2 trillion to cover a projected deficit of approximately N31.4 trillion.
Of the planned borrowing, N18.4 trillion is expected to come from domestic sources, while N10.79 trillion will be raised externally.
The president is now seeking legislative clearance for the external component.
Explaining the latest development, Akpabio said the new request effectively supersedes the previous $20.3 billion proposal because it provides a clearer picture of how the government intends to access the funds.
According to the Senate President, the latest communication gives the government room to explore different financing channels rather than depend on a single source of external borrowing.
Akpabio said the Federal Government would need to assess the available options and negotiate arrangements that offer the most favourable conditions.
He added that the process would operate under a willing-seller, willing-buyer framework, with the government expected to secure funding on terms that reflect prevailing market conditions.
Following the presentation, Akpabio referred the request to the Senate Committee on Local and Foreign Debts for consideration and a report to the chamber as soon as practicable.
The committee’s review will be an important step towards determining whether the proposed borrowing receives the required legislative approval.
In the letter, Tinubu outlined several funding channels the government intends to consider in raising the N10.79 trillion.
These include concessional and commercial loans from multilateral and bilateral development institutions, financing facilities from the International Monetary Fund (IMF), bridge financing, direct borrowing from international financial institutions and the issuance of Eurobonds.
The government may rely on one of these options or combine several of them, depending on the cost of borrowing, the benefits attached to each facility and how quickly the funds can be accessed.
However, Tinubu indicated that Eurobond issuance would receive greater attention because it could provide access to substantial funding within a relatively shorter period.
Eurobonds are international debt instruments issued by governments or companies to raise money from investors outside their domestic markets. For Nigeria, the option offers an opportunity to attract foreign capital without relying entirely on traditional bilateral or multilateral lending arrangements.
The president said the final borrowing conditions, including interest rates and repayment periods, would be determined when the funds are priced, taking prevailing market conditions into consideration.
He also assured lawmakers that the Federal Ministry of Finance and the Debt Management Office would work together to negotiate the most favourable terms available.
Tinubu said the proposed external borrowing would support priority projects and programmes already captured in the 2026 Appropriation Act.
The areas identified include defence and national security, transportation, agriculture, electricity, education and healthcare.
These sectors account for some of the government’s major spending priorities, particularly as Nigeria continues to grapple with security challenges, infrastructure gaps, power supply constraints and pressure on public services.
The president maintained that the proposed financing would help the government implement these projects and meet its obligations under the 2026 budget.
Beyond funding infrastructure and other public programmes, Tinubu also argued that the external borrowing could provide support for Nigeria’s foreign exchange reserves.
He explained that the proceeds would be paid into the Central Bank of Nigeria (CBN) on behalf of the Federal Government.
According to him, the inflow is expected to strengthen the country’s external reserves and, in turn, help support stability in the naira.
However, the extent of any impact on the foreign exchange market will depend on the timing of the inflows, the size of the funds eventually raised and broader market conditions.
In his appeal to the National Assembly, the president requested approval for the Federal Government to raise the N10.79 trillion external borrowing through one or more of the funding channels outlined in his letter.
He specifically asked lawmakers to give greater consideration to Eurobond issuance while allowing the government the flexibility to pursue other financing options where necessary.
Tinubu also sought authorisation for the Minister of Finance and Coordinating Minister of the Economy to work with the Debt Management Office in implementing the proposed borrowing arrangement once the necessary legislative resolution is secured.
The president urged the Senate to consider the request and issue its approval within a reasonable timeframe to enable the government to proceed with the financing plan.
For now, the proposal awaits consideration by the Senate Committee on Local and Foreign Debts before further legislative action.
