By Joshua Tosin Ogunsakin 
President Bola Tinubu has again written to the National Assembly, seeking approval for a fresh external borrowing of $2.3bn.
This is in addition to a plan to issue a $500m sovereign Sukuk, which will mark Nigeria’s debut in the international Islamic finance market.
The request, contained in a letter read on the floor of the House of Representatives by Speaker Tajudeen Abbas on Tuesday, complies with Sections 21(1) and 27(1) of the Debt Management Office Establishment Act, 2003.
The borrowing plan seeks legislative approval for external financing to implement the 2025 Appropriation Act, refinance maturing Eurobonds, and expand Nigeria’s debt instruments to include Islamic finance products.
Tinubu noted that “the 2025 fiscal framework anticipates $9.27bn in new borrowings to address the budget deficit, of which $1.84bn is earmarked for external sources at an assumed exchange rate of N1,500 to the dollar.”
He explained that the external borrowing would be sourced through various instruments, including Eurobonds, syndicated loans, bridge financing, or direct loans from multilateral institutions — in order to optimise cost and manage risk effectively.
A key element of the plan is the refinancing of Nigeria’s $1.118bn Eurobond, issued in 2018 at a coupon rate of 7.625% and due in November 2025.
“This is a standard practice in debt capital markets,” the President wrote. “Refinancing through Eurobonds or syndicated loans will guarantee debt sustainability and boost investor confidence.”
Tinubu maintained that refinancing maturing obligations was part of routine debt management and vital for maintaining Nigeria’s fiscal credibility.
The President’s letter also revealed a plan to issue a $500m sovereign Sukuk internationally, a move aimed at deepening Nigeria’s presence in the Islamic finance market.
The initiative follows the success of domestic Sukuk issuances, which have raised N1.39tn since 2017 to fund critical infrastructure projects such as major road construction.
According to Tinubu, the international Sukuk would help narrow Nigeria’s infrastructure funding gap while diversifying its investor base.
The government is also exploring a credit enhancement guarantee from the Islamic Corporation for the Insurance of Investment and Export Credit, a member of the Islamic Development Bank Group, to strengthen the offering.
“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,” the President said.
He assured lawmakers that the Federal Ministry of Finance and the Debt Management Office would engage reputable transaction advisers to secure the best pricing and terms amid volatile global market conditions.
Tinubu further expressed confidence in Nigeria’s reputation as a consistent and credible issuer in international capital markets, noting that the proposed transactions would reinforce investor trust and ensure prudent fiscal management.
The new borrowing request comes as Nigeria grapples with the twin challenges of financing a large budget deficit and managing a complex debt portfolio.
As Africa’s largest economy, the Federal Government continues to balance its drive for infrastructure-led growth with the need to maintain debt sustainability.
The 2025 budget includes plans to raise $9.27bn in new loans, with $1.84bn coming from external sources.
Analysts say the government’s growing reliance on a mix of domestic and foreign funding reflects a pragmatic response to rising inflation, currency volatility, and high global interest rates.
Nigeria’s success with domestic Sukuk issuance has demonstrated the potential of Islamic finance to fund tangible development projects. Expanding this strategy to global markets could enhance the country’s credit profile and reduce dependence on traditional borrowing methods.
The proposed involvement of the ICIEC guarantee is also expected to lower borrowing costs by improving Nigeria’s credit rating, making the new Sukuk more attractive to global investors. Allocating a quarter of the proceeds to retire expensive debts, observers note, reflects a cautious and strategic approach to managing the nation’s debt structure.