The Senate on Wednesday commenced consideration of President Bola Tinubu’s request for approval to obtain $7.7bn (N10.79tn) in external loans, referring the proposal to its Committee on Local and Foreign Debts for further scrutiny.
The proposed borrowing is part of the Federal Government’s financing strategy for the 2026 fiscal year, with the funds expected to help cover a budget deficit estimated at N31.4tn.
The request has renewed concerns over Nigeria’s rising debt burden and dependence on loans to finance government expenditure.
Tinubu’s request, contained in a letter dated October 26, 2026, was addressed to the President of the Senate, Godswill Akpabio.
The President sought legislative approval to raise 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 letter was read during plenary on Wednesday, after which Akpabio referred the proposal to the Committee on Local and Foreign Debts, directing it to submit its findings as soon as practicable.
The proposed external loan constitutes the foreign component of the N29.2tn borrowing approved under the 2026 Appropriation Act.
The borrowing plan comprises N18.4tn in domestic loans and N10.79tn in external financing to help fund the projected N31.4tn budget deficit.
“The 2026 Appropriation Act approved the sum of N29.2tn as new borrowings to part-finance the 2026 budget deficit of about N31.4tn,” the letter stated.
Tinubu said the request was in accordance with Sections 21(1) and 27(1) of the Debt Management Office (Establishment, etc.) Act, 2003, which stipulate that proposals for external borrowing must be submitted to and approved by the National Assembly.
The President explained that the government would consider different funding options concurrently, weighing their respective costs, benefits and the time required to secure the facilities.
He, however, said the government would prioritise Eurobond issuance because of its relatively faster processing and potential to raise substantial funds at lower costs.
“In view of this, emphasis will be on the issuance of Eurobonds, which is typically faster to conclude.
Additionally, a larger amount can be raised through Eurobonds at a relatively lower cost in respect to the terms and conditions of the Eurobond,” he stated.
Other financing channels 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.
The President noted that the final interest rates, repayment periods and other conditions would be determined by prevailing market conditions at the time the financing arrangements were concluded.
He added that the Ministry of Finance and the Debt Management Office would collaborate to obtain the most favourable borrowing terms for the country.
“The final terms and conditions, interest rate and tenors can only be determined at the time of pricing. They will all be subject to market conditions prevailing at the time.
“The Federal Ministry of Finance and the Debt Management Office will ensure that Nigeria secures the best terms and conditions within the context of the market,” the President said.
Tinubu said the proposed funds would be channelled into projects and programmes provided for in the 2026 Appropriation Act, with defence and security, transportation, agriculture, power, education and healthcare listed as priority sectors.
He maintained that the additional financing would enable the government to implement key budgetary programmes while sustaining the macroeconomic reforms and gains of his administration.
The President also argued that the foreign currency proceeds from the borrowing would boost Nigeria’s external reserves.
According to him, the funds would be paid into the Central Bank of Nigeria on behalf of the Federal Government, thereby increasing the country’s reserves.
He said the expected accretion to the reserves would provide additional support for the naira and improve Nigeria’s external position.
Under the proposed resolution, the President is seeking approval to raise the N10.79tn, or $7.7bn, through one or more of the identified financing options, with Eurobond issuance receiving particular emphasis.
Akpabio, while reacting to the request, urged the Federal Government to ensure that negotiations with prospective lenders produced favourable conditions that would serve Nigeria’s interests.
The Senate President warned against entering into loan agreements without carefully assessing their economic implications and repayment obligations.
“So we have to go out there and search for the best terms, and that’s what they may call a win-win seller, win-win buyer approach,” Akpabio said.
He subsequently referred the request to the Committee on Local and Foreign Debts for detailed examination, asking the panel to report back as soon as practicable.
The committee is expected to assess the proposed financing channels, borrowing options and terms of the facilities before the Senate makes a final decision on the request.
The latest borrowing proposal comes amid sustained concerns over Nigeria’s increasing public debt, rising debt-servicing costs and the government’s growing reliance on loans to bridge annual budget deficits.
While the Federal Government has maintained that borrowing is necessary to address revenue gaps and finance critical infrastructure and development projects, questions persist over the sustainability of the country’s debt profile and whether the returns from borrowed funds would justify their costs.
