The House of Representatives has approved President Bola Tinubu’s request to borrow $2.35 billion to help finance Nigeria’s 2025 budget deficit, alongside a plan to issue a $500 million debut sovereign sukuk in the international capital market.
The approvals came during Wednesday’s plenary following the adoption of a report by the House Committee on Aids, Loans and Debt Management. The chamber endorsed a new external borrowing of N1.84 trillion (approximately $1.23 billion) at a budget exchange rate of N1,500 to $1, as stipulated in the 2025 Appropriation Act. This borrowing is intended to partially cover the projected N9.28 trillion federal deficit.
President Tinubu had earlier written to the National Assembly seeking legislative backing for the loans, in line with Sections 21(1) and 27(1) of the Debt Management Office (Establishment) Act, 2003. He stated that the funds would be raised through Eurobonds, loan syndications, or bridge financing, depending on market conditions.
The President noted that current yields on Nigeria’s international bonds range between 6.8% and 9.3%, and the pricing of new Eurobonds would align with these rates.
Regarding the proposed $500 million sukuk, Tinubu said the issuance would attract new investor classes and deepen Nigeria’s government securities market. The proceeds are earmarked for critical infrastructure projects nationwide, with up to 25% potentially used to refinance high-cost existing debt.
Tinubu highlighted that Nigeria has raised over N1.39 trillion through domestic sukuk issuances between 2017 and 2025, primarily funding major road and infrastructure projects. The international sukuk would complement these efforts and expand funding sources.
The sukuk may be issued with or without credit enhancement from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a member of the Islamic Development Bank (IsDB) Group.
