Nigeria's Debt to Worsen as Tinubu Seeks $2.3bn External Borrowing

President Bola Tinubu has requested the approval of the House of Representatives to secure approximately $2.3 billion in external loans to cover the 2025 budget deficit and refinance maturing Eurobonds, which will further raise Nigeria’s debt profile.

Nigeria’s total public debt rose to N149.39 trillion as of March 31 this year, marking a year-on-year increase of N27.72 trillion, or 22.8 per cent, compared to the N121.67 trillion recorded in the corresponding period of 2024, Pinnacle Daily can report.

In a letter sent to the Green Chamber and read by Speaker Abbas Tajudeen during Tuesday’s plenary session, Tinubu further asked the lawmakers to approve the issuance of a $500 million debut sovereign Sukuk in the international capital market.

The president said the fresh borrowing is aimed at implementing provisions of the 2025 Appropriation Act, refinancing maturing Eurobonds, and diversifying Nigeria’s funding sources through Islamic finance instruments.

He noted that the 2025 budget provides for $9.27 billion in total new borrowings to finance the 2025 fiscal deficit, out of which $1.84 billion (₦1.23 trillion at an exchange rate of ₦1,500/$) is earmarked for external loans.

He urged the lawmakers to approve his request to source the funds through any of the following options: Issuance of Eurobonds, loan syndication, bridge financing from bookrunners, or direct borrowing from international financial institutions.

The president noted that Nigeria’s $1.118 billion Eurobond, issued in 2018 at 7.625 per cent and maturing in November 2025, will be refinanced to avoid default.

“This is a standard practice in debt capital markets,” the letter read in part, adding that refinancing through Eurobonds or syndicated loans would ensure debt sustainability and investor confidence.

Tinubu also sought approval for a standalone sovereign Sukuk of up to $500 million in the international market — with or without a credit enhancement guarantee from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a member of the Islamic Development Bank Group.

He said the decision was inspired by the government’s “considerable success” in domestic Sukuk issuances, which have raised ₦1.39 trillion since 2017 for critical infrastructure, particularly road projects.

The proposed international Sukuk will help bridge the country’s infrastructure funding gap and deepen its investor base, the president said.

“If the ICIEC credit guarantee is utilised, 25% of the proceeds will be used to repay relatively expensive debt obligations, while the balance will finance pre-identified infrastructure projects,” Tinubu stated in his letter.

He hinted that the Federal Ministry of Finance and the Debt Management Office would work closely with transaction advisers to secure the most favourable terms and pricing for all capital-raising efforts, subject to prevailing market conditions.

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“Nigeria remains a regular and reputable issuer in the international capital markets,” he said. He said he is confident that the country could successfully raise the proposed amounts.

Tinubu urged the lawmakers to pass a resolution authorising the federal government to raise $2.347 billion through Eurobonds, syndicated loans, or bridge financing; refinance the maturing $1.118 billion Eurobond due November 2025; and issue a $500 million sovereign Sukuk with potential ICIEC credit enhancement.

“I look forward to the timely issuance of the House’s resolution,” he stated, committing to prudent fiscal management and sustainable debt practices.

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