The Senate on Wednesday began scrutiny of President Bola Tinubu’s request to secure $7.7bn (N10.79tn) external loan, referring the proposal to its Committee on Local and Foreign Debts for detailed consideration.
The proposed borrowing, which forms part of the Federal Government’s financing plan for the 2026 fiscal year, is expected to contribute to funding a budget deficit estimated at N31.4tn, further placing government borrowing and growing debt obligations under legislative and public scrutiny.
Tinubu’s request, contained in a letter dated October 26, 2026, and addressed to the President of the Senate, sought the National Assembly’s approval to raise N10,790,366,835,481, equivalent to $7,707,404,882.49, using the budget exchange rate of N1,400 to the dollar.
The letter was read during Wednesday’s plenary, following which the Senate President, Godswill Akpabio, referred the request to the Committee on Local and Foreign Debts and directed it to report back as soon as practicable.
The proposed $7.7bn external borrowing represents the foreign component of the N29.2tn new borrowing provision contained in the 2026 Appropriation Act.
According to the President, the approved borrowing plan comprises N18.4tn in domestic loans and N10.79tn in external financing to part-finance the country’s projected N31.4tn budget deficit.
“The 2026 Appropriation Act approved the sum of N29.2tn as new borrowings to part-finance the 2026 budget deficit of about N31.4tn,” the letter stated.
Explaining the rationale for the request, Tinubu said the proposed borrowing complied with Sections 21(1) and 27(1) of the Debt Management Office (Establishment, etc.) Act, 2003, which require external borrowing proposals to be submitted to and approved by the National Assembly.
The President disclosed that the Federal Government would explore several financing options simultaneously, taking into consideration borrowing costs, the benefits of each option and the time required to access the funds.
However, he indicated that Eurobond issuance would receive greater attention because of its relatively faster processing time and capacity to generate 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,” he stated.
Other financing options identified in the letter included concessional and commercial loans from multilateral and bilateral institutions, facilities from the International Monetary Fund, bridge financing arrangements from book runners, loan syndications and direct borrowing from international financial institutions.
Tinubu, however, acknowledged that the final interest rates, repayment periods and other loan 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 the most 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.
“The Federal Ministry of Finance and the Debt Management Office will ensure that Nigeria secures the best terms and conditions within the context of the market,” the President said.
On the proposed utilisation of the funds, Tinubu said the external borrowing would support critical projects and programmes captured in the 2026 Appropriation Act.
He identified defence and security, transportation, agriculture, power, education and healthcare as priority sectors expected to benefit from the financing.
The President argued that the additional funds would provide the resources required to execute key budgetary programmes while consolidating the macroeconomic reforms and gains recorded by his administration.
He also made a case for the borrowing on the grounds that the foreign currency proceeds would contribute to Nigeria’s external reserves.
According to him, the funds would be received by the Central Bank of Nigeria on behalf of the Federal Government, leading to an accretion to the country’s foreign reserves.
Tinubu said the anticipated increase in reserves would provide additional support for the naira and strengthen Nigeria’s external position.
Under the proposed resolution, the President is seeking authorisation to raise the N10.79tn, equivalent to $7.7bn, through one or more of the identified financing channels, with particular emphasis on Eurobond issuance.
Reacting to the request, the Senate President stressed the need for the Federal Government to negotiate favourable borrowing conditions and ensure that any agreement reached with prospective lenders would be beneficial to Nigeria.
He cautioned against accepting loan arrangements without adequately examining their economic implications and the country’s repayment obligations.
“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,” the Senate President said.
He subsequently referred the request to the Committee on Local and Foreign Debts for detailed examination, directing the panel to submit its report as soon as practicable.
The committee is expected to scrutinise the proposed financing arrangements, available borrowing options and the terms under which the Federal Government intends to access the funds before the Senate takes a final position.
The latest request comes against the backdrop of persistent concerns over Nigeria’s rising public debt, debt-servicing obligations and the increasing reliance on borrowing to finance annual budget deficits.
Although the Federal Government has consistently maintained that borrowing is necessary to bridge revenue shortfalls and fund critical infrastructure and development projects, concerns remain over the sustainability of the country’s debt profile and the capacity of borrowed funds to generate returns that justify their cost.
