Lawmakers Approve Tinubu’s Request To Borrow $2.35bn, Issue $500m Sovereign Sukuk
The House of Representatives has approved President Bola Tinubu’s request to borrow $2.35 billion to finance part of the 2025 budget deficit.
The House also granted the President’s request to issue a $500 million debut sovereign sukuk in the international capital market to fund infrastructure projects and diversify Nigeria’s financing sources.
The president’s approval came on Wednesday after consideration of the report of the committee on aids, loans and debt management.
The green chamber approved the implementation of the new external borrowing of N1,843,669,786,987.16 (equivalent to $1,229,113,000.00) at the budget exchange rate of $1.00/N1,500 as provided as new external borrowing in the 2025 Appropriation Act, to part-finance the budget deficit of N9,276,348,934,935.79.
The president had sought the approval of the National Assembly, saying the external borrowing was backed by provisions of sections 21(1) and 27(1) of the Debt Management Office (Establishment) Act, 2003, which require legislative approval for new loans and refinancing arrangements.
Tinubu said the funds would be raised through one or a combination of instruments such as eurobonds, loan syndications, or bridge financing facilities, depending on prevailing market conditions.
He said the federal government expected the pricing of the new eurobonds to align with current yields on Nigeria’s existing bonds in the international market, ranging between 6.8 per cent and 9.3 per cent, depending on maturity.
On the proposed $500 million sovereign sukuk, Tinubu said the move would help diversify Nigeria’s investor base and deepen the government securities market.
“It is imperative to open new sources of funding for the federal government and to deepen the FGN securities market.
“The proposal is for the House of Representatives to approve the issuance of a stand-alone debut Sovereign Sukuk with or without credit enhancement (Guarantee) from the Islamic Corporation for the Insurance of Investment and Export Credit, ICIEC, a member of the Islamic Development Bank, IsDB, Group,” Tinubu said in the letter to the National Assembly.
Olamilekan Adigun is a graduate of Mass Communication with years of experience in journalism embedded in uncovering human interest stories. He also prioritises accuracy and factual reportage of issues.
