In a strategic move to shore up Nigeria’s 2025 fiscal framework, President Bola Ahmed Tinubu has formally appealed to the National Assembly for approval to raise $2.3 billion in fresh external borrowings paired with a $500 million sovereign Sukuk issuance. The funds are earmarked primarily to cover budget deficits, refinance maturing Eurobonds, and sustain ongoing development projects listed under the 2025 Appropriation Act.
This latest borrowing request is part of a broader fiscal strategy by the Tinubu administration to maintain budget liquidity and service debt amid ongoing economic pressures and infrastructural demands. The proposed $2.3 billion external loan will be secured through various mechanisms, including Eurobonds issued on the international capital market, bridge finance from financial bookrunners, syndicated loans, and direct bilateral or multilateral loans. The financing package is designed to complement the Nigerian government’s debt management objectives by also addressing upcoming debt maturities in a cost-effective and timely manner.
In a notable inclusion, the $500 million sovereign Sukuk—an Islamic bond compliant with Sharia principles—reflects a continued diversification of Nigeria’s debt instruments. This move is expected to attract a broader range of investors while optimizing borrowing costs and refinancing terms. The government’s pursuit of sovereign Sukuk signals a willingness to embrace innovative funding sources aligned with the nation's diverse investor base and fiscal prudence.
President Tinubu’s borrowing request follows the Nigerian Senate's earlier approval of a comprehensive borrowing plan totaling over $21 billion aimed at covering the 2025–2026 fiscal periods. That larger plan includes investments targeting Nigeria’s critical infrastructure renewal, such as funding for eastern rail rehabilitation and other key sectors like energy, agriculture, defense, and security.
Despite the administration’s assurances that these external debts will fund productive capital projects consistent with Nigeria’s medium-term fiscal strategy, the government faces scrutiny from stakeholders concerned about rising public debt levels. Nigeria’s total public debt, both domestic and external, stands at roughly $94 billion as of late 2024, stirring debates about debt sustainability amidst inflationary pressures and currency volatility.
Fiscal experts warn that while borrowing remains essential for bridging Nigeria's revenue-expenditure gap, it must be carefully managed with transparency and accountability safeguards to avoid exacerbating fiscal vulnerabilities. Criticism has also emerged regarding past loans showing limited direct impact on citizens' welfare, highlighting the need for rigorous oversight and prioritization of debt-funded projects with strong economic multipliers.
The National Assembly’s joint committees on finance, aid, loans, and debt management are now tasked with fast-tracking the assessment of this borrowing request. Legislative scrutiny will explore the technical justification, financial implications, and alignment with national development goals. The approval process, expected in coming weeks, will be crucial in enabling the full rollout of Nigeria’s 2025 budget implementation plan.
In line with this strategy, the African Development Bank has indicated plans to disburse $500 million to Nigeria before year-end, further complementing external funding sources supporting Nigeria’s development agendas.
President Tinubu’s request for fresh external capital through both conventional and innovative instruments underscores the administration's commitment to balancing the need for immediate fiscal space with the imperative of sustainable debt management. As Nigeria navigates economic challenges, the effective disbursement and utilization of these funds will be instrumental in stabilizing the economy, enhancing infrastructure, and delivering tangible benefits to its populace.