Senate Reviews Tinubu’s N10.79tn Foreign Loan Request
The Senate has begun considering President Bola Tinubu’s request for approval to raise $7.7bn (N10.79tn) in external loans to help finance the 2026 budget, referring the proposal to its Committee on Local and Foreign Debts for scrutiny.
The request was presented during Wednesday’s plenary through a letter dated October 26, 2026, and addressed to Senate President Godswill Akpabio.
Tinubu is seeking approval to raise N10,790,366,835,481, equivalent to $7,707,404,882.49 at the budget exchange rate of N1,400 to the dollar.
The proposed borrowing represents the external financing component of the N29.2tn new borrowing provision in the 2026 Appropriation Act. The approved borrowing comprises N18.4tn in domestic loans and N10.79tn in external financing to fund the budget deficit.
Following the reading of the letter, Akpabio referred the request to the Committee on Local and Foreign Debts and directed it to report back as soon as practicable.
The latest proposal replaces an earlier request by the Federal Government to secure $20.52bn and €1.05bn in external loans under its 2026–2027 Supplementary External Borrowing Plan.
In explaining the new financing arrangement, Tinubu said the government would explore different borrowing options simultaneously, taking into account their costs, benefits and the time required to access the funds.
He, however, indicated that greater emphasis would be placed on Eurobond issuance because of its relatively faster processing time and capacity to raise substantial funds.
“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,” the President stated.
Other financing options listed in the letter include concessional and commercial loans from multilateral and bilateral institutions, facilities from the International Monetary Fund, bridge financing arrangements, loan syndications and direct borrowing from international financial institutions.
Tinubu acknowledged that the final interest rates, repayment periods and other conditions would depend on prevailing market conditions when the financing arrangements are concluded.
He assured lawmakers that the Ministry of Finance and the Debt Management Office would work together to secure favourable 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,” he said.
On the proposed use of the funds, the President identified defence and security, transportation, agriculture, power, education and healthcare as priority sectors expected to benefit from the financing.
He argued that the borrowing would provide resources for projects and programmes contained in the 2026 Appropriation Act and support the economic reforms being implemented by his administration.
Tinubu also said the foreign currency proceeds would be received by the Central Bank of Nigeria on behalf of the Federal Government, contributing to the country’s foreign reserves.
According to him, the anticipated increase in reserves would strengthen Nigeria’s external position and provide additional support for the naira.
Reacting to the request, Akpabio stressed the need for the government to negotiate favourable borrowing conditions and carefully examine the economic implications of any agreement before committing the country.
“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,” he said.
The Senate committee is expected to examine the proposed financing arrangements, available borrowing options and the conditions under which the Federal Government intends to access the funds before the chamber takes a final decision.
The request comes amid continuing concerns over Nigeria’s public debt, rising debt-servicing obligations and the government’s reliance on borrowing to finance budget deficits.
While the Federal Government maintains that external financing is necessary to fund critical projects and bridge revenue shortfalls, questions remain over the sustainability of the country’s debt profile and whether the projects financed through borrowing will generate sufficient economic returns.
By Oluwafemi Shodipe.
