Tinubu seeks NASS approval for $2.8 billion loan, $500 million Sukuk issuance to finance 2025 budget

President Bola Ahmed Tinubu has sought approval from the House of Representatives to secure new foreign loans and debt refinancing worth $2.3 billion, along with the issuance of a maiden sovereign Sukuk worth $500 million in the international capital market.

The request was contained in a letter read on the House floor on Tuesday by Speaker Tajudeen Abbas. The president’s request is in accordance with Articles 21(1) and 27(1) of the Debt Management Office (DMO) Establishment Act, 2003.

Tinubu explained that the proposed loan is part of the financing framework of the 2025 Appropriation Act and is also intended to refinance maturing Eurobonds while diversifying Nigeria’s funding sources through Islamic financial instruments.

According to the letter, the 2025 budget provides a total of $9.27 billion in new borrowing to fund the fiscal deficit, of which $1.84 billion (₦1.23 trillion) is designated for external borrowing, based on an exchange rate of ₦1,500 to the dollar.

The President asked the Federal Government for legislative approval to raise funds through one of the following mechanisms: issuance of Eurobonds, loan syndication, bridge financing through book runners, or direct loans from international financial institutions.

He further revealed plans to refinance Nigeria’s $1.118 billion Eurobonds issued in 2018, with an interest rate of 7.625% and maturity in November 2025. “This is standard practice in debt capital markets,” Tinubu said, adding that refinancing through Eurobonds or syndicated loans would improve debt sustainability and investor confidence.

Highlighting the government’s “huge success” in domestic Sukuk issuance, which has raised ₦1.39 trillion since 2017 for critical infrastructure projects, Tinubu said the proposed international Sukuk will support infrastructure development and attract more investors.

“If the ICIEC credit guarantee is used, then 25% of the funds obtained will be used to pay relatively expensive debt obligations, while the remainder will finance predetermined infrastructure projects,” explained the President.

He assured the House that the Federal Ministry of Finance and the Debt Management Office (DMO) will work closely with transaction advisors to obtain the most favorable terms and prices for all capital raising activities, taking into account the prevailing market conditions.