President Bola Tinubu has asked the Senate to approve a fresh external borrowing of N10.79 trillion, equivalent to about $7.7 billion, to partly finance the 2026 budget deficit.
The request, contained in a letter read by Senate President Godswill Akpabio during plenary on Wednesday, seeks legislative authorisation for the Federal Government to implement the external borrowing component of the 2026 Appropriation Act.
The proposed loan represents a change from an earlier borrowing proposal of $20.52 billion and €1.045 billion submitted by the president to the National Assembly.
Akpabio said the latest request effectively superseded the previous proposal, describing the new communication as more explicit about the government’s borrowing plans and funding sources.
In the letter, Tinubu explained that the 2026 Appropriation Act provided for N29.2 trillion in new borrowing to finance a budget deficit estimated at N31.4 trillion.
The borrowing plan comprises N18.4 trillion in domestic borrowing and N10.79 trillion in external financing, with the latest request specifically covering the external component.
According to the president, the government intends to raise the $7.7 billion through one or a combination of financing options, including concessional and commercial loans from multilateral and bilateral institutions, International Monetary Fund facilities, bridge financing, direct borrowing from international financial institutions and Eurobond issuance.
He said the government would pursue the available options simultaneously, taking into account their respective costs, benefits and the time required to access the funds.
However, Tinubu indicated that greater emphasis would be placed on Eurobond issuance because of its relatively faster execution and capacity to raise larger amounts at competitive costs.
He explained that the final borrowing conditions, including interest rates and repayment periods, would depend on prevailing market conditions at the time of pricing.
The president assured that the Federal Ministry of Finance and the Debt Management Office (DMO) would work together to secure the most favourable terms for Nigeria.
Tinubu said the proposed funds would finance priority projects and programmes in defence and security, transportation, agriculture, power, education and healthcare.
He also noted that the proceeds would be received by the Central Bank of Nigeria on behalf of the Federal Government, adding that the inflows would contribute to the country’s external reserves.
The president requested approval for the borrowing at the 2026 budget exchange rate of N1,409 to the dollar and sought authorisation for the government to raise the funds through one or more of the identified financing sources, with greater emphasis on Eurobonds.
He further asked the National Assembly to empower the Minister of Finance and Coordinating Minister of the Economy, in collaboration with the DMO, to take the necessary steps to implement the borrowing arrangement.
Reacting to the request, Akpabio said the government would explore available financing options to secure the most favourable borrowing terms through a willing-seller, willing-buyer arrangement.
The Senate President subsequently referred the request to the Senate Committee on Local and Foreign Debt for further legislative consideration and a report back to the chamber as soon as practicable.
The proposed borrowing will require legislative approval before the Federal Government can proceed with the external financing arrangement.
