Reps Approve Tinubu’s Request To Borrow $2.35bn, Issue $500m Sovereign Sukuk

The House of Representatives has approved President Bola Tinubu’s request to borrow $2.35 billion to help cover part of Nigeria’s 2025 budget deficit.

The Lawmakers also gave approval for the president to issue a $500 million sovereign sukuk in the international capital market.

The move is aimed at raising funds for key infrastructure projects and broadening the country’s financing options.

The approval followed the consideration of a report from the House Committee on Aids, Loans, and Debt Management.

The green chamber approved the implementation of the new external borrowing of N1,843,669,786,987.16 (equivalent to $1,229,113,000.00) at the budget exchange rate of $1.00/N1,500 as provided as new external borrowing in the 2025 Appropriation Act, to part-finance the budget deficit of N9,276,348,934,935.79.

Earlier this month, President Tinubu wrote to the National Assembly seeking approval for the loans, citing provisions of the Debt Management Office (Establishment) Act, 2003, which require legislative consent for any new borrowing or refinancing arrangements.

He explained that the funds would be sourced through various means, including eurobonds, syndicated loans, or bridge financing facilities, depending on market conditions.

Tinubu added that the eurobonds would likely be priced in line with Nigeria’s current bond yields, which range from 6.8% to 9.3%, depending on their maturity period.

On the proposed $500 million sovereign sukuk, the president said the issuance would help diversify Nigeria’s investor base and strengthen the government’s presence in global Islamic finance markets.

According to him, the funds raised will be directed toward critical infrastructure projects across the country.

Tinubu noted that since 2017, the Federal Government has raised over ₦1.39 trillion through domestic sukuk offerings to finance major road and infrastructure projects. He said this international sukuk issue would complement those domestic efforts.

In his letter to lawmakers, Tinubu stated that the sukuk issuance may include a credit guarantee from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a member of the Islamic Development Bank (IsDB) Group.

He added that 25% of the proceeds from the sukuk could be used to refinance expensive existing debts, while the remaining funds would go into infrastructure development to support the government’s economic growth agenda.

KanyiDaily recalls that the First Lady, Oluremi Tinubu, recently revealed that her 65th birthday initiative raised over N20 billion to help complete the National Library in Abuja.