President Bola Tinubu has approached the National Assembly for approval to obtain $7.7bn (N10.79tn) in external financing as part of efforts to meet the funding requirements of the 2026 budget.
The Senate on Wednesday referred the request to its Committee on Local and Foreign Debts for examination, following the reading of the President’s letter by Senate President Godswill Akpabio during plenary.
Tinubu, in the letter dated October 26, 2026, requested approval to borrow N10,790,366,835,481, representing $7,707,404,882.49 at the budget exchange rate of N1,400 to the dollar.
The proposed foreign loan is part of the N29.2tn borrowing provision in the 2026 Appropriation Act, designed to finance a substantial portion of the Federal Government’s projected N31.4tn budget deficit.
The President explained that the borrowing plan comprises N18.4tn in domestic loans and N10.79tn in external financing.
“The 2026 Appropriation Act approved the sum of N29.2tn as new borrowings to part-finance the 2026 budget deficit of about N31.4tn,” Tinubu stated.
He said the request was submitted in accordance with Sections 21(1) and 27(1) of the Debt Management Office (Establishment, etc.) Act, 2003, which require the National Assembly to approve proposals for external borrowing.
According to the President, the government plans to explore different financing arrangements, taking into account their costs, potential benefits and the time required to secure the funds.
He identified Eurobond issuance as the preferred option, citing its relatively faster execution and ability to raise substantial amounts of foreign currency.
“In view of this, emphasis will be on the issuance of Eurobonds, which is typically faster to conclude. Additionally, a larger amount can be raised through Eurobonds at a relatively lower cost in respect to the terms and conditions of the Eurobond,” he said.
Other options under consideration include concessional and commercial facilities from multilateral and bilateral lenders, International Monetary Fund facilities, bridge financing from book runners, syndicated loans and direct credit arrangements with international financial institutions.
Tinubu acknowledged that the actual interest rates, maturity periods and other conditions would be determined by prevailing market conditions when the transactions are priced.
He said the Ministry of Finance and the Debt Management Office would collaborate to ensure that the country obtained the most favourable borrowing terms available.
“The Federal Ministry of Finance and the Debt Management Office will ensure that Nigeria secures the best terms and conditions within the context of the market,” he assured.
The President said proceeds from the proposed borrowing would finance selected projects and programmes captured in the 2026 budget, particularly in defence and security, transportation, agriculture, power, education and healthcare.
He maintained that the additional resources were necessary to support budget implementation, execute critical development programmes and consolidate the economic reforms being pursued by his administration.
Tinubu also argued that the foreign currency inflows would help improve Nigeria's external reserves, explaining that the proceeds would be received by the Central Bank of Nigeria on behalf of the Federal Government.
He said the anticipated accretion to the reserves would strengthen the country's external position and provide support for the naira.
Under the proposed arrangement, the executive is seeking authority to access the funds through one or a combination of the identified financing options, particularly Eurobonds.
Reacting to the request, Akpabio urged the Federal Government to ensure that any borrowing agreement was negotiated in the country's best interest.
The Senate President emphasised the importance of examining the implications of the proposed loans, especially the interest rates, repayment conditions and overall economic consequences.
“So we have to go out there and search for the best terms, and that’s what they may call a win-win seller, win-win buyer approach,” he said.
Akpabio subsequently referred the request to the Committee on Local and Foreign Debts, asking it to conclude its examination and submit its report as soon as practicable.
The committee's findings are expected to guide the Senate's decision on whether to grant the requested approval.
The proposed borrowing comes as Nigeria continues to grapple with mounting public debt and substantial debt-servicing obligations, with successive budgets relying heavily on domestic and foreign loans to cover financing gaps.
Although the Tinubu administration has defended its borrowing strategy as necessary to bridge revenue deficits and provide funding for infrastructure and essential public services, the growing debt burden has continued to attract criticism.
Of particular concern is the ability of the economy to generate sufficient revenue and returns from debt-funded investments to meet repayment obligations without further constraining public finances.
The latest request is therefore likely to renew scrutiny of the government's fiscal strategy, particularly the balance between borrowing for development and maintaining long-term debt sustainability.
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