President Bola Tinubu has requested the approval of the House of Representatives for new external borrowing and debt refinancing totaling $2.3 billion, alongside the issuance of a $500 million debut sovereign Sukuk in the international capital market.
The president stated that the new borrowing is aimed at implementing provisions of the 2025 Appropriation Act, refinancing maturing Eurobonds, and diversifying Nigeria’s funding sources through Islamic finance instruments.
The 2025 budget provides for $9.27 billion in total new borrowings to finance the year’s fiscal deficit, out of which $1.84 billion is earmarked for external loans. According to President Tinubu, the proposed international Sukuk will help bridge the country’s infrastructure funding gap and deepen its investor base. “Nigeria remains a regular and reputable issuer in the international capital markets,” he said, expressing confidence that the country could successfully raise the proposed amounts.
The president assured the House that the Federal Ministry of Finance and the Debt Management Office would work closely with transaction advisers to secure the most favorable terms and pricing for all capital-raising efforts, subject to prevailing market conditions. Nigeria’s $1.118 billion Eurobond, issued in 2018 at 7.625% and maturing in November 2025, will be refinanced to avoid default. “This is a standard practice in debt capital markets,” the letter noted, adding that refinancing through Eurobonds or syndicated loans would ensure debt sustainability and investor confidence.
President Tinubu urged the lawmakers to authorize the Federal Government to source the funds through any of the following options: issuance of Eurobonds, loan syndication, bridge financing from bookrunners, or direct borrowing from international financial institutions. If the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) credit guarantee is utilized, 25% of the proceeds will be used to repay relatively expensive debt obligations, while the balance will finance pre-identified infrastructure projects.
The proposed Sukuk will help Nigeria diversify its funding sources and attract ethical investors. According to President Tinubu, the government’s domestic Sukuk issuances have raised ₦1.39 trillion since 2017 for critical infrastructure, particularly road projects. The president’s request is contained in a letter read on the floor of the House by Speaker Tajudeen Abbas.
The House of Representatives’ approval is required for the Federal Government to access the funds. The president’s request is in line with Sections 21(1) and 27(1) of the Debt Management Office (DMO) Establishment Act, 2003.