Tinubu seeks House approval for $2.35bn loan, $500m Sovereign Sukuk

President Bola Ahmed Tinubu has formally written to the House of Representatives seeking approval to raise $2.347 billion from the international capital market to help finance part of the 2025 budget deficit and refinance Nigeria’s maturing Eurobonds.

In the same request, the President also sought the House’s approval for the issuance of a $500 million debut sovereign Sukuk, aimed at supporting critical infrastructure development across the country.

The letter was read during plenary on Tuesday by Speaker Abbas Tajudeen, marking the official commencement of the legislative process for approval.

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Tinubu said the request was made pursuant to Sections 21(1) and 27(1) of the Debt Management Office (Establishment, Etc.) Act, 2003.

Tinubu explained that the request was necessary to give effect to the borrowing provisions in the 2025 Appropriation Act, refinance the $1.118 billion Eurobond maturing in November 2025, and expand Nigeria’s access to diversified external funding sources.

The President stated that the 2025 budget provided for N9.28 trillion in new borrowings to bridge the fiscal deficit, out of which N1.84 trillion (equivalent to $1.229 billion) was earmarked as new external borrowing.

“The House of Representatives is kindly invited to issue its resolution allowing the government to raise the amount through any of the following options: issuance of Eurobonds, bridge finance facility from bookrunners, loan syndication, or direct borrowing from international financial institutions,” the President wrote.

According to him, the funds will be deployed to part-finance the 2025 budget deficit in line with the approved fiscal framework.

Tinubu also sought lawmakers’ approval to refinance the $1.118 billion Eurobond issued in 2018, which he said, will mature on November 21, 2025.

He said the move was necessary to “avoid default” and is in line with international best practices in debt capital markets.

“The plan is to refinance the maturing Eurobonds through issuance of Eurobonds, bridge finance facility, loan syndication, or direct borrowing from international financial institutions,” the President noted.

He said the aggregate external capital to be raised comprising $1.229 billion for new borrowing and $1.118 billion for refinancing amounts to $2.347 billion.

Tinubu said while all options would be explored, the government’s primary plan is to issue Eurobonds, leveraging Nigeria’s status as a regular participant in the international capital market.

“The terms and conditions can only be determined at the time of the transactions and will be subject to prevailing market conditions,” he added, noting that the Federal Ministry of Finance and the Debt Management Office (DMO) would collaborate with transaction advisers to secure the most favourable terms.

In a separate but related request, the President asked the House to authorise the issuance of a stand-alone debut Sovereign Sukuk of up to $500 million in the international capital market.

Tinubu said the debut international Sukuk would be modeled after the successful domestic Sukuk issuances that have raised over N1.39 trillion since 2017 for road and infrastructure development.

According to him, the initiative aims to diversify Nigeria’s investor base, open new funding sources, and deepen the sovereign securities market.