President Bola Ahmed Tinubu has requested approval from the House of Representatives for fresh external borrowing and debt refinancing amounting to $2.3 billion, along with the issuance of a debut $500 million sovereign Sukuk in the global capital market.
This was contained in a correspondence read at the plenary by Speaker Tajudeen Abbas.
The request seeks the endorsement of the National Assembly in accordance with Sections 21(1) and 27(1) of the Debt Management Office (DMO) Establishment Act, 2003.
The president explained that the proposed borrowing is targeted at implementing the 2025 Appropriation Act, refinancing due Eurobonds, and broadening Nigeria’s funding options through Islamic finance tools.
He stated that the 2025 budget makes provision for $9.27 billion in overall new borrowings to fund the fiscal deficit, of which $1.84 billion (N1.23 trillion at N1,500/$) is set aside for external loans.
The president appealed to lawmakers to authorise the Federal Government to raise the funds through any of the following channels: Issuance of Eurobonds; Loan syndication; Bridge financing from book runners; or Direct borrowing from global financial institutions.
He also disclosed that Nigeria’s $1.118 billion Eurobond, issued in 2018 at 7.625% and maturing in November 2025, would be refinanced to avoid default.
“This is a standard practice in debt capital markets,” the letter noted, stressing that refinancing via Eurobonds or syndicated loans would maintain debt stability and reassure investors.
He further highlighted that the government’s decision was influenced by its “considerable success” with domestic Sukuk issuances, which have generated N1.39 trillion since 2017 for vital infrastructure, mainly road construction.
He added that the planned international Sukuk would support bridging the nation’s infrastructure financing gap and widen its investor pool.
“If the ICIEC credit guarantee is utilised, 25% of the proceeds will be used to repay relatively expensive debt obligations, while the balance will finance pre-identified infrastructure projects,” the letter stated.
Tinubu assured the lawmakers that the Ministry of Finance and the Debt Management Office would collaborate with transaction advisers to obtain the best terms and pricing for all capital-raising initiatives, subject to prevailing market realities.
