Gloria Essien, Abuja
President Bola Ahmed Tinubu has written to the House of Representatives seeking approval for a new external borrowing and debt refinancing totaling $2.3 billion, alongside the issuance of a $500 million debut sovereign Sukuk in the international capital market.
The request was transmitted in a letter read on the floor of the House by Speaker Mr. Tajudeen Abbas on the resumption of plenary.
President Tinubu is seeking the National Assembly’s resolution in line with Sections 21(1) and 27(1) of the Debt Management Office (DMO) Establishment Act, 2003.
According to the President, the new borrowing is aimed at implementing provisions of the 2025 Appropriation Act, refinancing maturing Eurobonds, and diversifying Nigeria’s funding sources through Islamic finance instruments.
He further stated that the 2025 budget provides for $9.27 billion in total new borrowings to finance the year’s fiscal deficit, out of which $1.84 billion (₦1.23 trillion at an exchange rate of ₦1,500/$) is earmarked for external loans.
The President, therefore, urged the lawmakers to authorise the Federal Government to source the funds through any of the following options: Issuance of Eurobonds; Loan syndication; Bridge financing from bookrunners; or Direct borrowing from international financial institutions.
The President also said that Nigeria’s $1.118 billion Eurobond, issued in 2018 at 7.625% and maturing in November 2025, will be refinanced to avoid default.
“This is a standard practice in debt capital markets,” the letter noted, adding that refinancing through Eurobonds or syndicated loans would ensure debt sustainability and investor confidence.
Sukuk
Also, in a move to expand Nigeria’s access to Islamic finance, President Tinubu 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.
According to him, the decision was inspired by the government’s “considerable success” in domestic Sukuk issuances, which have raised ₦1.39 trillion since 2017 for critical infrastructure, particularly road projects.
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President Tinubu said the proposed international Sukuk would help bridge the country’s infrastructure funding gap and deepen its investor base.
The letter read in part: “If the ICIEC credit guarantee is utilised, 25% of the proceeds will be used to repay relatively expensive debt obligations, while the balance will finance pre-identified infrastructure projects.”
President Tinubu assured the lawmakers that the Federal Ministry of Finance and the DMO would work closely with transaction advisers to secure the most favourable terms and pricing for all capital-raising efforts, subject to prevailing market conditions.
Expressing confidence that the country could successfully raise the proposed amounts, he said, “Nigeria remains a regular and reputable issuer in the international capital markets.”
The President reaffirmed his commitment to prudent fiscal management and sustainable debt practices, and called on the House to pass a resolution authorising the Federal Government to: Raise $2.347 billion through Eurobonds, syndicated loans, or bridge financing; refinance the maturing $1.118 billion Eurobond due November 2025; and issue a $500 million sovereign Sukuk with potential ICIEC credit enhancement.
“I look forward to the timely issuance of the House’s resolution,” he said.