By: Manoah Kikekon
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| Bola Tinubu |
ABUJA, Nigeria – The House of Representatives has granted approval to President Bola Tinubu’s request to secure a $2.347 billion external loan from the international capital market. The funds are earmarked to part-finance the 2025 budget deficit and refinance maturing Eurobonds.
The approval was given during a plenary session on Wednesday, presided over by Speaker Tajudeen Abbas, following the consideration and adoption of a report from the House Committee on Aids, Loans, and Debt Management.
According to the report presented by the committee's chairman, Hon. Abubakar Hassan Nalaraba, the new borrowing plan is structured in two key parts. The first component is a sum of $1.23 billion designated to fund the deficit in the 2025 Appropriation Act. The second is $1.12 billion allocated to refinance a maturing Eurobond debt obligation due in November 2025.
During the Committee on Supply, presided over by Deputy Speaker Benjamin Kalu, the recommendations were put to a voice vote and received an affirmative response from the lawmakers.
In a significant move, the House also endorsed President Tinubu’s proposal for Nigeria to issue its first-ever Sovereign Sukuk bond in the international capital market. This Islamic finance instrument is approved for up to $500 million and may be issued with or without a credit guarantee.
The lawmakers authorized the Federal Government to implement the external borrowing component of the 2025 budget, amounting to ₦1.84 trillion (approximately $1.23bn at the budget exchange rate of ₦1,500/$1). The government is permitted to access these loans through various instruments, including Eurobond issuance, loan syndication, bridge financing, or direct borrowing from international financial institutions.
This latest approval is part of a series of external financing initiatives undertaken by the Tinubu administration since May 2023. The government has secured approximately $7.2 billion in external loans from the World Bank and a $1 billion facility from the African Development Bank to bolster economic reforms and development projects.