NIGERIA is heading for a deeper debt as the House of Representatives approved President Bola Tinubu’s request to borrow $2.85 billion to fund part of Nigeria’s 2025 budget deficit.
At the Wednesday’s plenary, the lawmakers sanctioned President’ Tinubus plan to borrow $2.35 billion and issue $500 million debut sovereign sukuk in the international capital market, with a view to financing infrastructure projects and diversifying the country’s financing sources.
The approvals were granted after a report by the House Committee on Aids, Loans and Debt Management. According to the resolution, members of the House of Reps sanctioned the implementation of a new external borrowing of $1.23 billion at a budget exchange rate of N1,500 per dollar, as provided in the 2025 Appropriation Act, to partially finance the projected N9.28 trillion federal deficit.
Earlier this month, Tinubu had written to the National Assembly seeking legislative approval for the external loan in line with Sections 21(1) and 27(1) of the Debt Management Office (Establishment) Act, 2003, which pescribes parliamentary consent for such arrangements.
READ ALSO: After World Bank facility, Tinubu eyes new loan, debt hits N88.6trn
In his request, the president said the loans would be raised through Eurobonds, loan syndications, or bridge financing — depending on prevailing market conditions.
He explained that the government expected Eurobond pricing to align with current yields on Nigeria’s existing international bonds, ranging between 6.8 percent and 9.3 percent, depending on maturity.
On the proposed $500 million sovereign sukuk, Tinubu noted the issuance would attract new classes of investors and deepen Nigeria’s government securities market. He explained that proceeds from the sukuk would be used to deepen critical infrastructure projects across the country.
The president revealed that Nigeria had raised more than N1.39 trillion through domestic sukuk issuances between 2017 and 2025 to fund major road and infrastructure projects, stressing that the planned international sukuk would help to complement those efforts.
“It is imperative to open new sources of funding for the federal government and to deepen the FGN securities market. The proposal is for the House of Representatives to approve the issuance of a stand-alone debut sovereign sukuk with or without credit enhancement (guarantee) from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a member of the Islamic Development Bank (IsDB) Group,” he said.
He added that up to 25 percent of the sukuk proceeds might be used to repay high-cost existing debt.
Debt binge
Economy Post had earlier reported that President Tinubu government’s loans constituted 43 percent of Nigeria’s total public debt, which stood at N152.398 trillion as of June 2025. His administration’s debt ratio will likely rise by the time Nigeria’s debt stock is released in September.
As of the time former President Muhmmadu Buhari left office on May 29, 2023, the nation’s total public debt stood at N87.379 trillion, according to the Debt Management Office (DMO)’s June 2023 data. However, with President Tinubu coming to power that same day, Nigeria’s debt profile rose thereafter, hitting N152.398 trillion as of June 2025, the DMO data reveal.
READ ALSO: Tinubu debt profile: How much has Nigeria borrowed since 2023?
This means that President Tinubu’s administration racked up N65.019 trillion between June 2023 and June 2025, marking 43 percent of the current public debt stock.
However, the figure does not include the recent debts taken by President Tinubu. In early September, Economy Post had reported that the World Bank could approve loans totalling $1.75 billion for Nigeria before the end of the year to support the nation’s agricultural value chain, digital infrastructure, health security and small businesses. There are also other smaller loans which have been announced or approved but are yet to be received by the Nigerian government.
The Nigerian government is in advanced talks with China’s Export-Import Bank for a $2 billion loan to construct a new electricity super grid to address Nigeria’s long-standing power supply challenges.
According to Minister of Power, Mr Adebayo Adelabu, “It’s part of plans to decentralise power generation in Nigeria and get the heavy commercial users that left the power grid because of its unreliability to return.”
