Tinubu Seeks Lawmakers’ Approval for $2.3bn Loan, $500m Islamic Bond to Refinance Debts

President Bola Ahmed Tinubu has written to the National Assembly, requesting approval for a fresh external borrowing of $2.3 billion to support the implementation of the 2025 Appropriation Act and refinance Nigeria’s maturing Eurobonds.

The request, which also includes plans to issue a $500 million sovereign Sukuk in the international market, was contained in a letter read on the floor of the House of Representatives by Speaker Tajudeen Abbas on Tuesday. The move aligns with the provisions of Sections 21(1) and 27(1) of the Debt Management Office (DMO) Establishment Act, 2003.

According to the President, the borrowing initiative forms part of the $9.27 billion new loans projected in the 2025 fiscal framework to bridge the budget deficit, with $1.84 billion expected from external sources at an assumed exchange rate of ₦1,500 to the dollar. The financing will be sourced through instruments such as Eurobonds, syndicated loans, and facilities from multilateral institutions — aimed at managing risks and optimizing costs.

Tinubu explained that a key objective is to refinance the $1.118 billion Eurobond issued in 2018 at 7.625%, which matures in November 2025. He described the refinancing plan as “a standard market practice” designed to ensure debt sustainability and bolster investor confidence in Nigeria’s fiscal credibility.

In addition, the President announced Nigeria’s intention to enter the global Islamic finance market through the issuance of a $500 million sovereign Sukuk. This follows the success of domestic Sukuk programmes that have raised ₦1.39 trillion since 2017 to finance major road and infrastructure projects. The international Sukuk, Tinubu noted, will diversify Nigeria’s investor base and help reduce the nation’s infrastructure deficit.

To strengthen the issuance, the Federal Government is exploring a credit guarantee from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a member of the Islamic Development Bank Group. Under this arrangement, 25% of the proceeds would be used to repay costly debt obligations, while the remainder would fund key infrastructure projects.

Tinubu assured lawmakers that the Federal Ministry of Finance and the Debt Management Office would work with reputable advisers to secure favorable terms despite volatile global markets. He reaffirmed Nigeria’s commitment to maintaining a reputation as a reliable issuer in the international capital market, emphasizing that the proposed borrowing and Sukuk issuance are consistent with the nation’s long-term debt management strategy.

The fresh borrowing request comes amid Nigeria’s ongoing efforts to balance infrastructure-driven growth with debt sustainability, as rising inflation, exchange rate fluctuations, and high global interest rates continue to pressure fiscal planning. Analysts say the initiative demonstrates the government’s pragmatic approach to diversifying its funding sources while strengthening the country’s credit profile.