President Bola Tinubu has asked the National Assembly to approve plans to raise $2.35 billion in external loans to part-finance the 2025 budget deficit and refinance Nigeria’s maturing Eurobonds, as well as issue a $500 million sovereign Sukuk to fund infrastructure.
The request, read at plenary on Tuesday by Abbas Tajudeen, Speaker of the House of Representatives is part of the government’s plan to bridge funding gaps, manage debt obligations, and attract new investors to the country’s capital markets.
According to the President, the $2.35 billion borrowing comprises new external loans of N1.843 trillion (about $1.229 billion at ₦1,500/$) to help finance the 2025 Appropriation Act and $1.118 billion to refinance Eurobonds issued in 2018, which are due to mature in November 2025.
Tinubu explained that the funds would be accessed through any of the following options in the International Capital Market (ICM): issuance of Eurobonds, syndicated loans, bridge finance facilities from bookrunners, or direct borrowing from international financial institutions.
“The House may wish to note that the 2025 Appropriation Act provides for N9.276 trillion as new borrowings to part-finance the 2025 budget deficit, of which N1.843 trillion (equivalent of about $1.229 billion at the budget exchange rate of $1.00/N1,500.00) is to be raised externally,” the President wrote.
He said the plan to refinance the maturing Eurobonds is a standard practice in global debt markets and will prevent any risk of default.
“The plan is to refinance the maturing Eurobonds through the issuance of Eurobonds, bridge finance facilities, syndicated loans, or direct borrowing from international financial institutions, as necessary, to avoid default,” Tinubu said.
The President added that Nigeria, as a regular participant in the ICM, is well-positioned to raise the proposed amount, subject to market conditions.
“Because Eurobond issuance is a market-based transaction, the terms and conditions can only be determined at the time of the transaction and will be subject to prevailing market dynamics,” Tinubu said, adding that the Federal Ministry of Finance and the Debt Management Office (DMO) would work with transaction advisers to secure the most favourable terms.
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He said the pricing of the new Eurobonds would reflect yields on Nigeria’s outstanding instruments trading in the ICM at the time of issuance, while the tenor would depend on investor preference, market price, and the DMO’s liability management strategy.
In a related development, Tinubu also sought approval to issue a debut stand-alone sovereign Sukuk of up to $500 million in the international capital market, with or without credit enhancement from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a member of the Islamic Development Bank (IsDB) Group.
He noted that Nigeria has recorded considerable success with domestic Sukuk issuances, which have raised N1.392 trillion since 2017 for road and infrastructure projects across the country.
Extending Sukuk issuance to the international market, he said, would allow Nigeria to mobilise additional funds for infrastructure, diversify its investor base, and deepen the sovereign debt market.
“There is the need to pool resources from external sources to complement domestic issuance to help bridge infrastructure funding gaps,” Tinubu said. “It is also imperative to open new sources of funding for the Federal Government and thereby diversify the investor base, as well as deepen the Federal Government securities market.”
Tinubu therefore urged the House to approve the external borrowing of $2.35 billion and the issuance of the $500 million Sukuk to ensure fiscal stability, sustain investor confidence, and support Nigeria’s infrastructure and economic growth plans.