Tinubu seeks NASS’ approval for $2.3bn external borrowing, $500m sovereign Sukuk

President Bola Tinubu has requested the approval of the National Assembly for new external borrowing and debt refinancing totalling $2.3 billion, alongside the issuance of a $500 million sovereign Sukuk in the international capital market.

The president’s request, conveyed through a letter read on the floor of the House of Representatives by Speaker Tajudeen Abbas, seeks legislative approval in line with Sections 21(1) and 27(1) of the Debt Management Office (DMO) Establishment Act, 2003.

Tinubu explained that the proposed borrowing aims to implement provisions of the 2025 Appropriation Act, refinance maturing Eurobonds, and diversify Nigeria’s funding sources through Islamic finance instruments.

According to him, the 2025 budget provides for $9.27 billion in total new borrowings to finance the fiscal deficit, out of which $1.84 billion (₦1.23 trillion) is designated for external loans. He asked lawmakers to authorise the Federal Government to source the funds through Eurobonds, loan syndication, bridge financing, or direct borrowing from international financial institutions.

The president noted that Nigeria’s $1.118 billion Eurobond, issued in 2018 at a rate of 7.625 percent and maturing in November 2025, will be refinanced to prevent default. “This is a standard practice in debt capital markets,” he stated, adding that refinancing would help maintain debt sustainability and investor confidence.

Tinubu also sought approval to issue a standalone sovereign Sukuk of up to $500 million in the international market, with or without a credit enhancement guarantee from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) a member of the Islamic Development Bank Group.

He said the move was inspired by the government’s success with domestic Sukuk issuances, which have raised ₦1.39 trillion since 2017 for key infrastructure projects, especially roads. If the ICIEC credit guarantee is utilised, 25 percent of proceeds will go toward repaying costly debt, while the remainder will fund pre-identified infrastructure projects.

The president assured lawmakers that the Federal Ministry of Finance and the DMO would work with transaction advisers to secure the most favourable terms based on market conditions.

“I look forward to the timely issuance of the House’s resolution,” Tinubu said, reaffirming his administration’s commitment to prudent fiscal management and sustainable debt practices.