President Bola Ahmed Tinubu has written to the National Assembly, asking for approval to borrow N1.767 trillion from foreign sources. This loan, he said, will help the government cover part of the N9.7 trillion deficit in the 2024 budget.
The letter was addressed to Senate President Godswill Akpabio and Speaker of the House of Representatives Tajudeen Abbas and was read during the plenary session on Tuesday.
President Tinubu explained that the loan is necessary to fund important projects and stabilize Nigeria’s economy. If approved, the money will be used for:
- Building infrastructure in power, transport, and agriculture.
- Improving national security through defense spending.
- Supporting the Naira by increasing foreign reserves in the Central Bank of Nigeria (CBN).
The president outlined three ways to raise the funds:
1. Eurobonds: Nigeria can sell bonds to international investors in the International Capital Market (ICM). Tinubu noted that other African countries like Côte d’Ivoire and Kenya have successfully done this in 2024.
2. Sovereign Sukuk: The government may issue $500 million worth of Sukuk bonds, which follow Islamic financing principles. This will be supported by the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC).
3. Bridge Finance/Syndicated Loans: If Eurobonds face delays, Nigeria could borrow from international banks like Citigroup, Goldman Sachs, and JPMorgan.
The government plans to pursue all three options but will prioritize Eurobonds because they are faster and cheaper to arrange.
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In addition to the loan request, President Tinubu also sent:
- The 2025-2027 Medium Term Expenditure Framework (MTEF), a plan for managing Nigeria’s finances over the next three years.
- A proposal to amend the National Social Investment Programme law. This amendment will make the social register the main tool for running welfare programs.
Just last week, the Federal Government approved a plan to borrow $2.2 billion externally. While some Nigerians worry about the country’s rising debt, the government believes these loans are crucial for development and economic stability.