President Bola Tinubu has asked the House of Representatives to approve the implementation of N10.79tn ($7.71bn) in external borrowing provided for in the 2026 budget, as the World Bank approved another $500m loan for Nigeria to address flooding, environmental degradation and farmer-herder conflicts.
The developments come amid growing concerns over Nigeria’s rising external debt and the Federal Government’s increasing dependence on foreign loans to finance budget deficits and development projects.
Tinubu’s request was contained in a letter addressed to the Speaker of the House of Representatives, Tajudeen Abbas, and read during Wednesday’s plenary.
The President explained that the proposed borrowing represented the external component of the N29.22tn new borrowing approved in the 2026 Appropriation Act to finance part of the Federal Government’s budget deficit.
He said the external borrowing amounted to N10,790,366,835,481, equivalent to $7.71bn at the budget exchange rate of N1,400 to the dollar.
According to Tinubu, the request was made in compliance with Sections 21(1) and 27(1) of the Debt Management Office Establishment Act, 2003, which require the terms and conditions of external loans to be submitted to and approved by the National Assembly.
The approved N29.22tn borrowing comprises N18.28tn in domestic loans and N10.79tn in external financing.
Tinubu said the government would explore different financing options simultaneously, but indicated that Eurobond issuance would receive greater attention because of the speed with which substantial funds could be raised.
“All options will be pursued simultaneously, considering the cost-benefit to the country as well as the time required to access the funds. In view of this, emphasis will be on the issuance of Eurobonds, which is typically faster to conclude,” he said.
He added that the final terms of the proposed Eurobond issuance would depend on prevailing market conditions when the government approaches the international capital market.
The President said the Ministry of Finance and the Debt Management Office would work to secure favourable borrowing terms.
He listed defence and security, transportation, agriculture, power, education and health among the sectors expected to benefit from the proceeds.
Tinubu also said the funds would help strengthen Nigeria’s external reserves and support the naira, explaining that the Central Bank of Nigeria would receive the proceeds on behalf of the Federal Government.
He requested authorisation to access the funds through multilateral and bilateral institutions, commercial lending windows, the International Monetary Fund, bridge financing facilities and Eurobond issuance.
However, Abbas clarified that the President was not seeking approval for a fresh borrowing plan, noting that the N10.79tn external borrowing had already been approved under the 2026 budget.
He said the request was specifically for legislative approval of the terms and conditions of the loans, as required by the DMO Act.
The Speaker also explained that the request was separate from another proposal by the President for additional borrowing, which would be considered independently.
“For the avoidance of doubt, this request is distinct from the President’s more borrowing request. It neither supersedes nor withdraws that request, which remains subject to consideration on its own merit,” Abbas said.
Nigeria’s 2026 budget provides for a deficit of N31.55tn, with N29.22tn expected to come from new borrowing.
Meanwhile, the World Bank announced the approval of an additional $500m financing for Nigeria under its Agro-Climatic Resilience in Semi-Arid Landscapes Project, known as ACReSAL.
The funding is designed to tackle environmental degradation, improve water management, restore agricultural land and reduce conflicts arising from competition over natural resources in 19 northern states and the Federal Capital Territory.
In a statement published on its website on Wednesday, the bank said the intervention would support the restoration of 1.4 million hectares of degraded land and benefit approximately 6.6 million people by 2031.
The project will also support watershed rehabilitation, erosion control and improved flood management in communities exposed to climate-related disasters.
According to the bank, the intervention is expected to improve household incomes, strengthen food and water security, reduce farmer-herder conflicts and increase agricultural productivity.
The additional financing will expand the existing ACReSAL programme, which began in 2022 to address environmental challenges and climate vulnerabilities across northern Nigeria.
The World Bank said the project had already introduced sustainable landscape management practices on about 550,000 hectares and reached more than 4.4 million beneficiaries.
It added that the programme had exceeded its target for improved catchment management.
The World Bank Country Director for Nigeria, Mathew Verghis, said the additional funding would enable the government to expand interventions that had produced positive results in vulnerable communities.
He said investments in climate-resilient landscapes had demonstrated their capacity to improve livelihoods and strengthen food and water security.
Similarly, the ACReSAL Task Team Leader, Iganya Agene, said the financing would help translate existing institutional reforms and planning into larger investments capable of creating jobs and improving economic opportunities.
The project is being implemented by the Federal Ministry of Environment in collaboration with the Federal Ministry of Water Resources and Sanitation and the Federal Ministry of Agriculture and Food Security.
The latest $500m approval comes about four months after the World Bank approved a $1.25bn financing package for Nigeria on June 29, 2026, under its Nigeria Actions for Investment and Jobs Acceleration programme.
The package comprised a $750m credit from the International Development Association and a $500m loan from the International Bank for Reconstruction and Development to support economic reforms, private investment and job creation.
However, the latest approval comes amid a substantial increase in Nigeria’s outstanding obligations to the World Bank.
Figures published by the Debt Management Office showed that Nigeria’s debt to the World Bank increased from $14.34bn in March 2023, shortly before Tinubu assumed office, to $20.73bn as of June 30, 2026.
The increase of $6.39bn represents a 44.6 per cent rise within the period.
The debt stock comprised $19.12bn owed to the International Development Association and $1.61bn to the International Bank for Reconstruction and Development.
The World Bank consequently accounted for 38.02 per cent of Nigeria’s total external debt of $54.52bn at the end of June 2026, making it the country's largest multilateral creditor.
The Federal Government is also seeking another $500m World Bank loan to establish an infrastructure financing platform, with the proposed approval scheduled for May 25, 2027, barely four days before the inauguration of Nigeria’s next president.
The successive financing requests have renewed attention on Nigeria’s external debt profile, the cost of servicing its obligations and the effectiveness of borrowed funds in addressing the country’s infrastructure and development challenges.
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