The House of Representatives has approved President Bola Tinubu’s request to borrow $2.35 billion to help finance Nigeria’s 2025 budget deficit, alongside a $500 million debut sovereign sukuk issuance in the international capital market. The approval marks a major step in implementing the external financing component of the 2025 Appropriation Act, which outlines a total budget deficit of ₦9.27 trillion.
The green chamber also endorsed the implementation of a new external borrowing of ₦1.84 trillion (equivalent to $1.23 billion) at the budget exchange rate of ₦1,500 to $1. The funds are expected to be raised through eurobonds, syndicated loans, or bridge financing facilities, depending on market conditions.
Sukuk Strategy and Infrastructure Goals
In his letter to the National Assembly, President Tinubu explained that the $500 million sukuk would help diversify Nigeria’s investor base and deepen the government securities market. The proceeds are earmarked for critical infrastructure projects, with up to 25% allocated for refinancing high-cost existing debt and the remainder directed toward new development initiatives.
Between 2017 and 2025, the federal government has raised over ₦1.39 trillion through domestic sukuk issuances, primarily for road and infrastructure projects. The international sukuk is intended to complement these efforts and attract Islamic-compliant investors through potential credit enhancement from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a member of the Islamic Development Bank (IsDB) Group.
Tinubu’s fiscal strategy aims to stabilise the naira, strengthen foreign reserves, and reduce reliance on domestic borrowing, which has contributed to rising debt servicing costs.
Public Sentiment: Borrowing for Progress or Burden?
Fairview Africa spoke with residents in Abuja to gauge public opinion on the new borrowing plan. Reactions were sharply divided.
Eunice expressed concern: “This borrowing is just too much, and I don’t think it will help ordinary Nigerians like us. They are just doing it for their selfish interests.”
Addyemo David offered a more optimistic view: “Borrowing is very normal in a country, but the use is what matters. When you borrow, you should have a very direct use, and the use should be on infrastructure such as roads and schools. To me, this current president has been doing a lot in terms of paying our backlog, and all the borrowing he has done, he has been able to use it well.”
Economic Context and Debt Concerns
Nigeria’s public debt has been rising steadily, prompting warnings from economists and civil society groups about long-term sustainability. While borrowing can be a tool for development, critics argue that without transparency and measurable outcomes, it risks becoming a burden for future generations.
Supporters of the plan point to the need for capital investment in infrastructure, education, and healthcare—sectors that have suffered from chronic underfunding. They argue that external financing, if well-managed, can unlock growth and attract foreign investment.
