President Bola Tinubu has asked the National Assembly to
approve fresh external borrowing of about $7.7 billion to part-finance the 2026
budget deficit, with the Senate President, Godswill Akpabio, saying the request
“effectively supersedes an earlier borrowing proposal of $20.3 billion”.
Tinubu’s request, contained in a letter dated October 26,
2026, was read by Akpabio during Wednesday’s plenary.
The president is seeking approval for external borrowing of
N10.79 trillion, equivalent to approximately $7.7 billion at the budget
exchange rate of N1,409 to the dollar.
In the letter, Tinubu said the request was made pursuant to
Sections 21(1) and 27(1) of the Debt Management Office Establishment Act, 2003.
Section 21(1) provides that no external loan shall be
approved or obtained by the Minister of Finance unless its terms and conditions
are presented to the National Assembly and approved through a resolution.
Section 27(1) also empowers the national assembly to
approve, by resolution, standard terms and conditions for negotiating and
accepting external loans and issuing guarantees.
Tinubu said the 2026 Appropriation Act approved N29.2
trillion in new borrowing to finance a budget deficit of approximately N31.4
trillion.
The borrowing requirement comprises N18.4 trillion in
domestic loans and N10.79 trillion in external financing, with the latest
request covering the external component.
Reacting to the letter, Akpabio said it effectively
superseded the earlier request for $20.3 billion because the new proposal is
more explicit about how the government intends to raise the funds.
“I believe this letter effectively supersedes the earlier
request for 20.3 billion US dollars because the present request is more
explicit. It also recognises that the borrowing will not necessarily come from
one source,” he said.
Akpabio said the government would have to explore available
funding options and secure the most favourable terms.
“The government will have to explore the available options
and secure the best possible terms under a willing-seller, willing-buyer
arrangement,” he said.
The Senate President referred the request to the committee
on local and foreign debts to report back as soon as practicable.
HOW TINUBU PLANS TO RAISE THE FUNDS
According to the letter, the federal government plans to
raise the $7.7 billion through one or a combination of funding options.
The proposed sources include concessional and commercial
loans from multilateral and bilateral institutions, International Monetary Fund
(IMF) facilities, bridge financing, direct borrowing from international
financial institutions and eurobond issuance.
Tinubu said the options would be pursued simultaneously,
taking into account their respective costs, benefits, and the time required to
access the funds.
However, he said greater emphasis would be placed on
eurobond issuance because it is generally faster to conclude and could raise
larger amounts at relatively competitive costs.
“The final terms and conditions, including interest rates
and tenures, will be determined at the time of pricing, depending on prevailing
market conditions,” the president said.
He added that the federal ministry of finance and the Debt
Management Office (DMO) would ensure that Nigeria secured the best possible
terms.
Tinubu said the external borrowing would finance priority
programmes and projects contained in the 2026 Appropriation Act.
The projects, he said, cover defence and security,
transportation, agriculture, power, education and healthcare.
The president also said the borrowing is expected to support
the country’s external reserves because the funds would be received by the
Central Bank of Nigeria (CBN) on behalf of the federal government.
“This, in turn, is expected to support the stability of the
naira,” he said.
Tinubu asked the national assembly to authorise the federal
government to implement the N10.79 trillion external borrowing and approve the
use of one or more of the identified funding sources, with greater emphasis on
eurobond issuance.
He also urged the legislators to empower the minister of
finance and coordinating minister of the economy to work with the DMO to
implement the resolution.
He expressed the expectation that the senate would issue the
necessary resolution in a timely manner.
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