KEY POINTS
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Tinubu seeks approval to access N10.79tn in foreign loans.
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Government plans to prioritise Eurobond issuance.
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Abbas says the request is not for fresh borrowing.
President Bola Tinubu has asked the House of Representatives to approve the implementation of the Federal Government’s N10.79tn external borrowing plan contained in the 2026 Appropriation Act.
The request, presented in a letter to Speaker Tajudeen Abbas and read during Wednesday’s plenary, seeks authorisation for the government to raise $7.71bn from foreign lenders and international financial markets to finance part of the 2026 budget deficit.
Tinubu said the proposed borrowing was already included in the budget approved by the National Assembly and was part of the N29.22tn in new loans earmarked to finance the Federal Government’s spending gap.
The request is therefore not for a fresh borrowing plan but for the legislative approval of the terms and conditions required before the government can access the external funds.
External loans form part of N29.22tn borrowing plan
According to the President, the 2026 budget provides for N29.22tn in new borrowing, comprising N18.28tn from domestic sources and N10.79tn from external sources.
The external component is equivalent to approximately $7.71bn, calculated using the budget exchange rate of N1,400 to the dollar.
Tinubu explained that the request was in line 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 presented to and approved by the National Assembly.
He said the government intended to pursue different financing options simultaneously, taking into account the cost of borrowing and the time required to secure the funds.
Government favours Eurobond issuance
The President indicated that the government would place greater emphasis on issuing Eurobonds, describing the option as a faster way to raise substantial funds at relatively lower costs.
However, he noted that the final terms and conditions of any Eurobond issuance would depend on prevailing international market conditions when the funds are priced.
Tinubu said the Ministry of Finance and the Debt Management Office would work together to secure the most favourable borrowing terms available.
Other financing options listed in the request include loans from multilateral and bilateral institutions, conventional and commercial lending facilities, the International Monetary Fund and bridge financing arrangements.
He also asked the House to authorise the Minister of Finance and Coordinating Minister of the Economy, in collaboration with the DMO, to take the necessary steps to implement the borrowing plan.
Funds to finance key sectors and support naira
Tinubu said the external loans would be used to finance projects and programmes already captured in the 2026 budget.
The priority sectors include defence and security, transportation, agriculture, electricity, education and healthcare.
He also argued that the funds would help strengthen Nigeria’s external reserves and support the naira.
According to the President, the proceeds would be received by the Central Bank of Nigeria on behalf of the Federal Government.
Abbas clarifies request is not for fresh borrowing
Responding to the President’s letter, Speaker Tajudeen Abbas clarified that the request did not seek approval for a new borrowing plan.
He explained that the N10.79tn external borrowing component had already been approved by the National Assembly as part of the 2026 Appropriation Act.
According to Abbas, the President was seeking the statutory authorisation required to implement the borrowing by presenting its terms and conditions for legislative approval.
He cited Sections 21(1) and 27(1) of the DMO Act, which establish the National Assembly’s role in approving the terms governing external loans.
The Speaker also distinguished the request from a separate proposal by the President for additional borrowing, stressing that both matters would be considered independently.
He said the latest request neither replaced nor withdrew the separate borrowing proposal, which remained subject to consideration by lawmakers.
Nigeria’s 2026 budget carries N31.55tn deficit
The request comes amid growing concerns about the Federal Government’s reliance on borrowing to finance its spending obligations and the implications for public debt sustainability.
Nigeria’s 2026 budget provides for a deficit of N31.55tn, with N29.22tn in new borrowing identified as a major source of financing.
The latest request is intended to allow the government to access the external portion of the borrowing already provided for in the budget, rather than introduce a new borrowing figure.
