Senate Greenlights Tinubu’s $21 Billion Plus Foreign Loan Request

Abuja – The Nigerian Senate on Tuesday approved President Bola Tinubu’s extensive foreign borrowing plan, totaling over $21 billion for the 2025–2026 fiscal period. This crucial approval paves the way for the full implementation of the 2025 Appropriation Act, providing the necessary financial backing for critical national development projects.

The comprehensive borrowing package includes $21.19 billion in external loans, €4 billion, ¥15 billion, and a $65 million grant. Additionally, the plan incorporates domestic borrowing through government bonds amounting to approximately ₦757 billion, primarily intended to settle outstanding pension liabilities as of December 2023. A novel provision also allows for raising up to $2 billion through foreign-currency-denominated instruments within the domestic market, aiming to tap into local foreign currency liquidity for infrastructure financing.

The Senate’s nod followed the consideration of a report by Senator Aliyu Wamako, Chairman of the Committee on Local and Foreign Debt. Senator Wamako noted that the loan request, initially submitted by President Tinubu on May 27, faced delays due to the National Assembly’s recess and some documentation issues from the Debt Management Office.

ADVERTISEMENT

Senator Olamilekan Adeola, Chairman of the Appropriations Committee, clarified that the majority of this borrowing plan was already incorporated into the Medium-Term Expenditure Framework (MTEF) and the 2025 budget. He emphasized that with this approval, all projected revenue sources, including these substantial loans, are now secured to fully fund the national budget.

Sources within the Senate confirmed that the funds are earmarked for vital sectors across the economy, including infrastructure, agriculture, security, power, housing, digital connectivity, health, and education. A significant allocation within the plan is $3 billion designated for the revitalization of the Eastern Rail Corridor, which stretches from Port Harcourt to Maiduguri.

Senators who supported the motion, such as Senator Sani Musa (APC-Niger) and Senator Adetokunbo Abiru (APC-Lagos), highlighted that the loans are largely concessional with low-interest rates and long repayment terms, some extending from 20 to 35 years. They assured that these facilities comply with the Fiscal Responsibility Act and the Debt Management Act, emphasizing that the funds are “strictly tied to capital and human development projects.” Senator Musa further clarified that the loan disbursement would span six years, not just 2025, and asserted that Nigeria has not defaulted on its existing debt obligations.

While the approval received broad support, it also sparks ongoing public discussions about Nigeria’s rising debt profile and the long-term implications of continued borrowing. However, the government maintains that these strategic investments are crucial for unlocking Nigeria’s economic potential and improving the welfare of its citizens.