The Nigerian Senate on Tuesday approved President Bola Tinubu’s 2025–2026 external borrowing plan of $21.5 billion, alongside additional loan requests of 15 billion Japanese Yen and a 65 million Euro grant.
The upper legislative chamber also greenlit the issuance of a N757 billion Federal Government Bond to settle accrued pension arrears under the Contributory Pension Scheme as of December 2023.
Additionally, the Senate approved Tinubu’s request to raise up to $2 billion through foreign-currency-denominated instruments in the domestic market. The approvals followed the presentation and consideration of a report by the Senate Committee on Local and Foreign Debt, chaired by Senator Aliyu Wamakko (APC, Sokoto North).
The Tinubu administration had argued that the loans were essential to fund critical national development projects across key sectors of the economy. In his presentation, Wamakko noted that the borrowing plan was already captured in the Medium-Term Expenditure Framework and Fiscal Strategy Paper for the 2025 budget.
“The MTEF and FSP contained most of the items in the borrowing plans,” Wamakko said. “Based on our findings, the committee recommends that the Senate approve the president’s request.”
Senator Solomon Adeola (APC, Ogun West), Chairman of the Senate Committee on Appropriations, who seconded the motion, described the approval as largely procedural since the borrowing plans were already embedded in the 2025 budget.
“The borrowing is already embedded in the 2025 Appropriation Act,” Adeola said. “With this approval, we now have all revenue sources, including loans, in place to fully fund the budget.”
Senator Sani Musa (APC, Niger East), Chairman of the Senate Committee on Finance, emphasized that the borrowing plan spans a six-year disbursement period rather than just the 2025 fiscal year. He also assured that Nigeria has not defaulted on any existing loan repayments.
“There’s no economy that grows without borrowing,” Musa said. “What we are doing is in line with global best practices.”
Senator Adetokunbo Abiru (APC, Lagos East) further defended the loan request, stating that it complies with the Fiscal Responsibility Act and the Debt Management Act. He highlighted the favorable terms of the loans, including extended repayment periods.
“These loans are long-term, concessional, and come with favorable repayment terms,” Abiru said. “Some stretch between 20 and 35 years.”
However, Senator Abdul Ningi (PDP, Bauchi Central) raised concerns over the lack of a detailed repayment plan in the committee’s report. He stressed the need for transparency in how the borrowed funds would be utilized to benefit Nigerians.
Ningi questioned whether the committee had outlined how the loans would be repaid and how they would directly impact constituents. His concerns underscored ongoing debates about Nigeria’s rising debt profile and the sustainability of external borrowing.
The Senate’s approval paves the way for the federal government to proceed with its borrowing plans, which it insists are crucial for infrastructure development and economic growth. However, critics continue to call for greater accountability in debt management to ensure borrowed funds translate into tangible benefits for citizens.
