Tinubu Seeks Reps’ Approval For $2.34b External Borrowing, $500m Sovereign Sukuk
President Bola Tinubu has written to the House of Representatives seeking the approval of plans by the federal government to raise $2.34 billion in external capital.
The fund is aimed at financing part of the 2025 budget deficit and refinancing maturing Eurobonds.
The speaker, Abba Tajudeen, read the president’s request on the floor of the house on Tuesday.
Mr Tajudeen said that the president also sought parliamentary approval for the issuance of a $500 million debut sovereign Sukuk in the international capital market.
He said that the request was made in accordance with the provisions of Sections 21(1) and 27(1) of the Debt Management Office (DMO) Establishment Act 2003.
According to the president, the total external capital to be raised amounts to $2.347 billion, comprising $1.229 billion in new external borrowing provided for in the 2025 Appropriation Act and $1.118 billion.
He further stated that the money was to refinance maturing Eurobonds due in November.
Mr Tinubu said that the borrowing would be sourced through a mix of Eurobond issuance, loan syndications, bridge financing and direct borrowing from international financial institutions, depending on market conditions.
He said that the new financing was part of the government’s strategy to support infrastructure development, refinance costly debt obligations and sustain investor confidence in Nigeria’s credit market.
The president sought the legislature’s authorisation for the issuance of a stand-alone $500 million sovereign Sukuk in the international capital market — the first of its kind for Nigeria.
He said that the Sukuk would diversify Nigeria’s funding sources, attract ethical investors and complement domestic Sukuk issuances that had raised over $1.39 trillion since 2017 for critical road projects across the country.
“The proposed Sukuk may be issued with or without a credit enhancement guarantee from the Islamic Corporation for Insurance of Investment and Export Credit (ICIEC) — member of the Islamic Development Bank Group
“Under the plan, up to 25 per cent of the proceeds could be used to refinance high-cost government debts, while the balance will fund pre-identified infrastructure projects,” he said.
Mr Tinubu assured that the refinancing of the maturing $1.118 billion Eurobonds due in November was a standard practice in global debt management, aimed at avoiding default and maintaining market credibility.
He affirmed the willingness of the federal ministry of finance and the Debt Management Office to collaborate with transaction advisers to ensure the most favourable market terms and conditions at the time of issuance.
