Senate Begins Consideration of Tinubu’s ₦10.79tn External Loan Request

The Senate on Wednesday began considering President Bola Tinubu’s request to secure an external loan of $7.7bn (₦10.79tn), referring the proposal to its Committee on Local and Foreign Debts for detailed scrutiny.

The proposed borrowing forms part of the Federal Government’s financing plan for the 2026 fiscal year and is expected to contribute towards funding a budget deficit estimated at ₦31.4tn. The request has renewed attention on government borrowing and the country’s growing debt obligations.

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 ₦10,790,366,835,481, equivalent to $7,707,404,882.49, using the budget exchange rate of ₦1,400 to the dollar.

The letter was read during Wednesday’s plenary, after which Senate President Godswill Akpabio referred the proposal to the Committee on Local and Foreign Debts and directed it to submit its report as soon as practicable.

The proposed $7.7bn external borrowing represents the foreign component of the ₦29.2tn new borrowing provision contained in the 2026 Appropriation Act.

According to Tinubu, the approved borrowing plan comprises ₦18.4tn in domestic loans and ₦10.79tn in external financing to part-fund the country’s projected ₦31.4tn budget deficit.

The President said the 2026 Appropriation Act had approved ₦29.2tn in new borrowing to finance part of the budget deficit.

Explaining the legal basis 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.

He disclosed that the Federal Government would explore several financing options simultaneously, taking into account borrowing costs, the benefits of each option and the time required to access the funds.

However, he indicated that greater attention would be given to Eurobond issuance because of its relatively faster processing time and capacity to generate substantial funds.

Tinubu said Eurobonds were typically faster to conclude and could provide access to larger amounts at relatively lower costs, depending on the terms and conditions.

Other financing options identified in the letter include 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.

The President acknowledged that the final interest rates, repayment periods and other loan conditions would depend on prevailing market conditions when the financing arrangements were concluded.

He assured lawmakers that the Federal Ministry of Finance and the Debt Management Office would work together to secure favourable terms for the country.

Tinubu said the final terms, interest rates and repayment periods could only be determined when the financing arrangements were priced, adding that they would be subject to market conditions at the time.

On the proposed utilisation of the funds, the President 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.

Tinubu argued that the additional funds would provide resources for implementing key budgetary programmes while supporting the macroeconomic reforms and gains recorded by his administration.

He also justified 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, resulting in an increase in the country’s foreign reserves.

The President said the anticipated increase in reserves would provide additional support for the naira and strengthen Nigeria’s external position.

Under the proposed resolution, Tinubu is seeking authorisation to raise the ₦10.79tn, equivalent to $7.7bn, through one or more of the identified financing channels, with particular emphasis on Eurobond issuance.

Responding to the request, Akpabio stressed the need for the Federal Government to negotiate favourable borrowing conditions and ensure that agreements 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.

The Senate President said the government needed to seek the best available terms through negotiations that would benefit both parties.

He subsequently referred the request to the Committee on Local and Foreign Debts for detailed examination.

The committee is expected to scrutinise the proposed financing arrangements, available borrowing options and the conditions under which the Federal Government intends to access the funds before the Senate takes a final position.

The latest request comes amid persistent concerns over Nigeria’s rising public debt, debt-servicing obligations and increasing reliance on borrowing to finance annual budget deficits.

While the Federal Government has 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 whether the returns from borrowed funds will justify their cost.