Tinubu Seeks Senate Approval for $7.7bn External Loan

… Akpabio Says Fresh Request Supersedes Earlier $20.3bn Proposal

President Bola Ahmed Tinubu has asked the Senate to approve a fresh external borrowing of $7.7 billion, equivalent to N10.79 trillion, to part-finance the Federal Government’s 2026 budget deficit.

The request, contained in a letter dated October 26, 2026, was read by Senate President Godswill Akpabio during plenary.

In the correspondence, Tinubu sought approval for the Federal Government to raise N10,790,366,835,481 at the budget exchange rate of N1,409 to one US dollar.

Reacting to the request, Akpabio said the latest correspondence effectively superseded an earlier proposal seeking approval for $20.3 billion in external borrowing.

“I believe this letter effectively supersedes the earlier request for 20.3 billion US dollars because the present request is more explicit,” he said.

The Senate President explained that the new proposal also recognised that the Federal Government would not necessarily obtain the entire loan from one source.

“It also recognises that the borrowing will not necessarily come from one source. The government will have to explore the available options and secure the best possible terms under a willing-seller, willing-buyer arrangement,” Akpabio added.

In the letter, Tinubu recalled that the 2026 Appropriation Act approved N29.2 trillion in new borrowings to finance a budget deficit estimated at approximately N31.4 trillion.

The borrowing plan comprises N18.4 trillion in domestic borrowing and N10.79 trillion in external borrowing, with the external component forming the subject of the latest request.

The President said the Federal Government intended to raise the $7.7 billion through one or a combination of several financing options.

These include concessional and commercial loans from multilateral and bilateral institutions, the International Monetary Fund (IMF), bridge financing facilities, direct borrowing from international financial institutions and Eurobond issuance.

According to Tinubu, all available options would be pursued simultaneously, taking into consideration their costs, benefits and the time required to access the funds.

However, he said greater emphasis would be placed on Eurobond issuance because it is generally faster to conclude and can raise larger amounts at relatively competitive costs.

“In view of this, emphasis will be on the issuance of Eurobonds, which is typically faster to conclude,” the President stated.

On the cost of borrowing, Tinubu explained that the final interest rates, repayment periods and other conditions would depend on prevailing market conditions at the time of pricing.

He assured that the Federal Ministry of Finance and the Debt Management Office would work together to secure the best possible terms for the country.

The President said the proposed external borrowing was necessary to implement programmes and projects contained in the 2026 Appropriation Act.

He listed defence and security, transportation, agriculture, power, education and health as the priority sectors expected to benefit from the funds.

Tinubu also argued that the borrowing would help strengthen Nigeria’s external reserves and support the stability of the naira.

He explained that the funds would be received by the Central Bank of Nigeria on behalf of the Federal Government, thereby increasing the country’s foreign reserves.

“It is also important to note that the process will increase the accretion to the external reserves since they will be received by the Central Bank of Nigeria on behalf of the Federal Government of Nigeria and thereby support the naira exchange rate,” he said.

The President made the request pursuant to Sections 21(1) and 27(1) of the Debt Management Office (Establishment, etc.) Act, 2003.

“The provisions require external borrowing arrangements to be presented before the National Assembly for approval through a resolution.”

Tinubu also requested authorisation for the Minister of Finance and Coordinating Minister of the Economy, working with the Debt Management Office, to take all necessary steps to implement the proposed borrowing.

Following the presentation of the correspondence, Akpabio referred the request to the Senate Committee on Local and Foreign Debt for further consideration.

He directed the committee to report back to the Senate as soon as practicable.

The Senate is expected to consider the committee’s report before taking further action on the proposed $7.7 billion external borrowing.