President Bola Tinubu has requested the National Assembly’s approval to obtain a fresh external loan of $2.3 billion, in addition to plans to issue a $500 million sovereign Sukuk as part of Nigeria’s debut in the international Islamic finance market.
The request, detailed in a letter read by House Speaker Tajudeen Abbas on Tuesday, aligns with Sections 21(1) and 27(1) of the Debt Management Office (DMO) Establishment Act, 2003.
According to the President, the proposed borrowing will support the implementation of the 2025 Appropriation Act, refinance maturing Eurobonds, and expand Nigeria’s debt instruments to include Islamic finance products.
Tinubu stated that the 2025 fiscal framework projects $9.27 billion in new borrowings to finance the budget deficit, with $1.84 billion to be sourced externally at an assumed exchange rate of ₦1,500 per dollar.
He explained that the funds would be raised through Eurobonds, syndicated loans, bridge financing, or direct loans from multilateral lenders, aimed at optimising borrowing costs and managing risks.
A key component of the plan is the refinancing of Nigeria’s $1.118 billion Eurobond, issued in 2018 at a 7.625% coupon rate and due for maturity in November 2025.
- “This is a standard practice in debt capital markets,” Tinubu wrote. “Refinancing through Eurobonds or syndicated loans will guarantee debt sustainability and boost investor confidence.”
He emphasised that refinancing maturing obligations is essential to maintaining Nigeria’s fiscal credibility and ensuring sustainable debt management.
The President’s letter also disclosed plans to issue a $500 million sovereign Sukuk internationally, following the success of domestic Sukuk offerings that have raised ₦1.39 trillion since 2017 for critical infrastructure projects, including major road constructions.