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Senate Begins Scrutiny Of Tinubu’s Fresh ₦10.79trn Foreign Loan
The Senate on Wednesday began consideration of President Bola Tinubu’s request to secure a $7.7bn (N10.79tn) external loan to finance part of the Federal Government’s 2026 budget deficit.
The request was referred to the Senate Committee on Local and Foreign Debts for detailed scrutiny after the President’s letter was read during plenary.
Senate President Godswill Akpabio directed the committee to examine the proposal and submit its report as soon as practicable.
Tinubu’s request, contained in a letter dated October 26, 2026, seeks legislative approval to borrow N10,790,366,835,481, equivalent to $7,707,404,882.49, based on the budget exchange rate of N1,400 to the dollar.
The proposed external borrowing forms part of the N29.2tn new borrowing provision in the 2026 Appropriation Act, which is intended to finance a projected budget deficit of approximately N31.4tn.
According to the President, the approved borrowing plan comprises N18.4tn in domestic loans and N10.79tn in external financing.
Tinubu explained that the proposed borrowing was in line with Sections 21(1) and 27(1) of the Debt Management Office (Establishment, etc.) Act, 2003, which require external borrowing proposals to receive approval from the National Assembly.
He disclosed that the Federal Government would explore multiple financing options, taking into consideration borrowing costs, the benefits of each arrangement and the time required to access the funds.
However, the President indicated that greater emphasis would be placed on Eurobond issuance because of its relatively faster processing time and capacity to raise substantial funds.
He said Eurobonds could provide access to larger amounts of financing at relatively favourable costs, depending on prevailing market conditions.
Other financing options outlined in the letter include concessional and commercial loans from multilateral and bilateral institutions, facilities from the International Monetary Fund, bridge financing from book runners, syndicated loans and direct borrowing from international financial institutions.
Tinubu, however, acknowledged that the final interest rates, repayment periods and other loan conditions would depend on market conditions at the time the financing arrangements are concluded.
He assured lawmakers that the Federal Ministry of Finance and the Debt Management Office would work together to secure the most favourable terms for Nigeria.
On the utilisation of the proposed loan, the President said the funds would support critical projects and programmes captured in the 2026 Appropriation Act.
The priority sectors identified include defence and security, transportation, agriculture, power, education and healthcare.
He argued that the additional financing would provide the resources required to implement key budgetary programmes and sustain the macroeconomic reforms of his administration.
The President also said the foreign currency proceeds would contribute to Nigeria’s external reserves, as the funds would be received by the Central Bank of Nigeria on behalf of the Federal Government.
According to him, the expected increase in foreign reserves would provide additional support for the naira and strengthen the country’s external financial position.
Under the proposed resolution, Tinubu is seeking authorisation to raise the $7.7bn through one or more of the identified financing channels, with particular emphasis on Eurobond issuance.
Reacting to the request, Akpabio stressed the importance of negotiating favourable borrowing conditions, warning that Nigeria must carefully examine the economic implications and repayment obligations attached to any loan agreement.
He said the government must ensure that the terms negotiated with prospective lenders would be beneficial to the country.
The Senate President subsequently referred the request to the Committee on Local and Foreign Debts for further examination before the Senate takes a final decision.
The committee is expected to scrutinise the proposed financing arrangements, available borrowing options and the conditions under which the Federal Government intends to access the funds.
The latest borrowing request comes amid growing concerns over Nigeria’s rising public debt, increasing debt-servicing obligations and continued reliance on loans to finance annual budget deficits.
While the Federal Government maintains that borrowing is necessary to address revenue shortfalls and fund critical infrastructure and development projects, concerns persist over the sustainability of the country’s debt profile and whether borrowed funds will generate sufficient economic returns to justify their costs.
