President Bola Ahmed Tinubu on Tuesday, formally requested the approval of the National Assembly to secure a new wave of multi-currency loans amounting to approximately $23.5 billion, €2.265 billion, ¥15 billion, and N757.9 billion (totaling about N45 trillion when converted to Nigeria’s currency).
The borrowing plan spanning multiple international lenders and development institutions marks one of the most ambitious external financing proposals of his administration to date.
Specifically, the President is seeking approval for the capital raising of up to $2 billion in the domestic debt market.
This, he said, was to ensure the implementation of the Presidential Executive Order on foreign currency-denominated financial instrument local issuance programme.
Also, the President requested the approval of the legislative arm for the federal government’s 2025-2026 external borrowing plan.
However, the Director, Information and Public Relations, Federal Ministry of Finance, Mohammed Manga, in a statement made available to THISDAY, Tuesday, clarified that the proposed debt rolling plan outlines the external borrowing framework for both the federal and sub-national governments over a two-year period.
Manga, stressed that importantly, the debt rolling plan does not equate to an automatic increase in the nation’s debt burden. He explained that majority of the proposed borrowing would be sourced from Nigeria’s development partners, including the World Bank, African Development Bank, French Development Agency, European Investment Bank, JICA, China EximBank, and the Islamic Development Bank. These institutions offer concessional financing with favorable terms and long repayment periods, thereby supporting Nigeria’s development objectives sustainably.
This was as the Senate on Tuesday, took a significant step towards reforming the management of Nigeria’s public assets by introducing the Ministry of Finance Incorporated (Repeal & Re-enactment) Bill, 2025.
The fresh borrowing plan, according to Tinubu, would be used to finance critical projects cutting across various sectors of the economy, particularly infrastructure, health, education, water supply, among others.
Tinubu noted that as stated in the Presidential Executive Order, the proceeds of the debt instrument to be raised from the domestic market and its accretion shall be ring-fenced and invested in critical sectors to be approved by the President on the recommendation of the Minister of Finance and Coordinating Minister of the Economy, subject to appropriation of the National Assembly.
The President added that the minister in making his recommendation, shall have regard to a sector’s capacity to accelerate economic growth, earn foreign exchange, drive infrastructure development, create jobs, and yield reasonable returns on investment.
Tinubu stressed that one of the benefits of the policy was that investors would have the opportunity to earn reasonable income on their US Dollar funds, while allowing the government to channel the funds to productive uses in the economy.
The president added that it was a viable fiscal strategy with the potential to boost accretion to reserves and promote exchange rate stability.
Tinubu pointed out that it would help diversify the sources of funding for the government and deepen the investor base for government Securities.
He said it would also increase the range of products in the local financial market and enable investors to diversify their portfolios.
On the cost implications for public debt, Tinubu stressed that the capital raising would lead to increase in the public debt stock; and would also increase debt service costs.
In the Senate, Tinubu’s request was conveyed to the Senators in a letter read to the lawmakers on the floor by the President of the Senate, Senator Godswill Akpabio.
Part of the letter read, “The 2025–2026 borrowing plan covers all sectors with specific emphasis on infrastructure, agriculture, health, education, water supply, growth, security, and employment generation, as well as financial and monetary reforms, among others.”
The total loans requested under the external borrowing plan included $21,543,647,912; €2,193,856,324.54; ¥15 billion; and a €65 million grant.
Tinubu, acknowledged the impact of the fuel subsidy removal on the economy and explained that the loans would be utilised to address areas of challenge.
He said, “In light of the significant infrastructure deficit in the country and the paucity of financial resources needed to address this gap amid declining domestic demand, it has become essential to pursue prudent economic borrowing to close the financial shortfall.”
He assured the Senators that the funds would be judiciously applied in the 36 states and the Federal Capital Territory (FCT).
The President said, “This initiative aims to generate employment, promote skill acquisition, foster entrepreneurship, reduce poverty, and enhance food security, as well as to improve the livelihoods of Nigerians.”
The letter was referred to the Senate Committee on Local and Foreign Debts for further legislative measures within two weeks.
In the Red Chamber, Tinubu also wrote a second letter seeking approval for the issuance of federal government’s Bond in the domestic debt market to offset outstanding pension liabilities under the Contributory Pension Scheme. The bond is in the sum of N 757.9 billion. Tinubu explained that the bond issuance was intended to address long-standing pension arrears and fulfill the government’s commitment to retired public sector employees.
Akpabio, while admitting the presidential requests, referred all of them to the Committee on Local and Foreign Debts for scrutiny.
Similarly, in the House of Representatives, the letter was addressed to the Speaker.
Part of the letter read by the Speaker stated: “I write to request the kindly approval of the National Assembly for capital raising of up to $2 billion in the domestic debt market toward the implementation of the Presidential Executive Order on Foreign Currency Denominated Financial Instrument Local Issuance Programme and Related Matters Order, 2023 dated October 19, 2023 (Order No. 16 of 2023) by the Debt Management Office (DMO).
“The House of Representatives may wish to note that this request is pursuant to the provisions of Section 44(1-2) of the Fiscal Responsibility Act (FRA), 2007 which requires the approval of the National Assembly for all New Borrowings and Section 1(7) of the Presidential Executive Order that requires the NASS to appropriate the proceeds of the capital raising.
“Further to the provisions of the FRA 2007 which defines, the Use of Proceeds of all borrowings and requires Cost-Benefit Analysis of capital raising, please find below.”
On the request of the National Assembly for the issuance of federal government Bonds in the domestic debt market by the DMO to settle outstanding pension liabilities, the President wrote: “I write to request for the kind approval of the National Assembly for the issuance of Federal Government of Nigeria (FGN) Bonds in the domestic debt market by the DMO to settle outstanding pension liabilities under the CPS as at December 2023 in the sum of N757,983,246,571.”
The President noted that Section 15(4) – Guarantees the right of retirees to pension review in line with the provisions of the 1999 Constitution (as amended), which provides that pension shall be reviewed every five years or whenever salaries are reviewed:
He further highlighted Section 6(2) – which requires the government to fund the shortfall in the Retirement Savings Accounts (RSAs) of eligible University Professors who are to retire on their full salary in line with extant laws; and,
The president noted that Section 82(2) – Establishes the Pension Protection Fund and mandates the federal government to contribute an annual subvention of one per cent into the Fund to part-finance the minimum Pension Guarantee for retirees whose RSA balances had depleted while receiving the pension.
He stated: “The House of Representatives is invited to note that the FGN has not been complying with the implementation of the above provisions of the PRA 2014 over the years due to revenue challenges leading to accumulation of pension arrears with the attendant hardship to retirees.
“To settle the accrued pension liabilities as of December 2023 in the sum of N757,983,246,571.00, the government has decided to raise funds through the issuance of FGN Bonds in the domestic debt market.
“The proposed Issuance of FGN Bonds to settle outstanding pension liabilities was approved by the Federal Executive Council in its meeting held on February 4, 2025.
“This request to the National Assembly to approve the Issuance of FGN Bonds by the DMO to settle pension liabilities in the sum borrowing of N757,983,246,571.00 is pursuant to the provisions of Section 44(1-2) of the Fiscal Responsibility Act (FRA), 2007 which requires the approval of the NASS for all New Borrowings by the FGN.”
The president emphasised that the projects and programmes included in the Borrowing Plan were selected based on thorough technical and economic evaluations, as well as their anticipated contribution to the socio-economic development of the country.
These initiatives, he added, aimed at generating employment, promoting skill acquisition, fostering entrepreneurship, reducing poverty, and enhancing food security, all of which would improve the livelihoods of the average Nigerian.
