From Adesuwa Tsan, Abuja
The Senate has approved President Bola Tinubu’s external borrowing plan of over $21 billion to fund the 2025/2026 budget.
This followed the adoption of a report presented by the Senate Committee on Local and Foreign Debt at plenary yesterday.
The approval clears the path for the full implementation of the 2025 Appropriation Act, as it provides a legal backing for loans already embedded in the budget and Medium-Term Expenditure Framework (MTEF).
Chairman of the Debt Committee, Aliyu Wamakko, laid the report, which had been pending since May 27 due to documentation delays from the Debt Management Office (DMO) and the National Assembly recess.
The borrowing package includes $21.19 billion in direct foreign loans, €4 billion, ¥15 billion, $65 million grant, N757.9 billion in domestic borrowing through FGN bonds and capital raising of up to $2 billion through a dollar-denominated instrument issued locally.
According to Chairman of the Appropriations Committee, Olamilekan Adeola, the loan had already been accounted for in the 2025 budget. “The borrowing is already embedded in the 2025 Appropriation Act. With this approval, we now have all revenue sources, including loans, in place to fully fund the budget,” he said.
Chairman of the Finance Committee, Sani Musa, clarified that the loans would be disbursed over a six-year period, not just within the 2025 fiscal year. “There’s no economy that grows without borrowing. What we are doing is in line with global best practices. And most importantly, Nigeria has not defaulted on its existing loan obligations,” Sani stated.
On concerns about debt sustainability, Chairman of the Senate Committee on Banking, Finance and Other Financial Institutions, Adetokunbo Abiru, reassured his colleagues that all the loans complied with the Fiscal Responsibility Act and the Debt Management Office Act.
“These are long-term, concessional loans with favourable repayment terms, some have tenors of up to 35 years. And all are tied to capital and human development projects,” he said.
However, Abdul Ningi raised concerns about transparency, faulting the absence of a detailed allocation breakdown by state and agency. He said: “We need to tell our constituents exactly how much is being borrowed in their name and for what purpose.”
Projects listed in the loan package include the Eastern rail line from Port Harcourt to Maiduguri, power generation and digital connectivity infrastructure, agricultural and housing development and security operation.
Elated by the inclusion of the Easter rail line, Victor Umeh welcomed the investment in the eastern rail corridor, saying, “This is the first time I’ve seen $3 billion allocated to rebuild the eastern line. That alone justifies my full support.”
Deputy Senate President, Jibrin Barau, praised the committee’s work and said no region was left behind. “This shows the Renewed Hope Agenda is working. The entire nation is being carried along,” he said.
The Senate also approved a separate request from the President for the issuance of foreign currency-denominated bonds of up to $2 billion in the local market.
The instrument, backed by Executive Order No. 16 of 2023, is aimed at tapping into dollar liquidity already present within Nigeria, including diaspora remittances and funds from foreign businesses operating in the country.
In its report, the Committee said the move would deepen the local capital market and attract more foreign investment by expanding the financial products on offer. It added that the initiative demonstrates a strategic approach to debt management with the borrowing ring-fenced for sectors that drive growth, such as power, digital infrastructure and transport.
The programme also offers an alternative to external borrowing, reducing pressure on foreign reserves while mobilising funds for infrastructure.
“The proceeds shall be ring-fenced and invested in sectors approved by the President, on the recommendation of the Minister of Finance, subject to appropriation by the National Assembly,” the report read.
Though it acknowledged the increase in debt stock and service obligations, the committee said the medium-to-long-term economic impact would outweigh the cost.
The Senate also approved the issuance of N757.9 billion in domestic bonds to clear outstanding pension liabilities under the Contributory Pension Scheme as of December 2023.
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