President Bola Tinubu has formally asked the House of Representatives for the necessary statutory approval to move forward with the N10.79tn external borrowing plan outlined in the 2026 Appropriation Act.
The President said the request is to part-finance the 2026 budget deficit.
The request is contained in a letter from the President and read on the floor of the House during plenary by the Speaker.
In the letter, President Tinubu recalled that the 2026 Appropriation Act approved N29.2tn in new borrowings to partially finance the 2026 budget deficit of about N31.4tn.
He explained that the total new borrowings were further subdivided into new domestic borrowing of N18.4tn and new external borrowings of N10.79tn.
The President said the N10.79tn, equivalent to $7.70bn at the budget exchange rate of N1,400 to the dollar, is the subject of the request.
President Tinubu said the external financing would be mobilised through several channels, including Eurobond issuance, concessional and commercial loans from multilateral and bilateral institutions, International Monetary Fund facilities, bridge financing, loan syndications and direct borrowing from international financial institutions.
The President noted that emphasis would be on the issuance of Eurobonds, which is typically faster to conclude, and that all options would be pursued simultaneously, considering cost, relative benefits and time required to access the funds.
President Tinubu explained that the proceeds are targeted at critical capital projects across key sectors, including infrastructure, defence and security, agriculture, healthcare, power, transportation and education.
He also sought authorisation for the Minister of Finance and Coordinating Minister of the Economy, in collaboration with the Debt Management Office, to take the necessary steps to implement the borrowing arrangement once approved.
He urged prompt legislative clearance to enable the executive to implement capital programmes and infrastructural interventions captured in the 2026 budget.
Following the reading of the letter, the House referred the executive communication to the joint committee on Aids, Loans and Debt Management and Finance for further legislative action.
What You Should Know
President Bola Tinubu is asking federal lawmakers to greenlight a foreign loan of N10.79tn, which equates to about $7.70bn, to help cover the shortfalls in the 2026 national budget. The government plans to raise these funds through a mix of Eurobonds, commercial loans, and international financial institutions.
- Positive Impact: The borrowed funds are primarily targeted at funding crucial capital projects across critical sectors like infrastructure, healthcare, power, security, and education, which could boost overall economic development.
- Potential Concerns: Increasing external borrowing adds to the country’s growing public debt profile, which could place a heavier repayment burden on the nation’s future revenues and foreign exchange reserves.
