President Bola Tinubu has formally requested the approval of the National Assembly for a fresh external borrowing plan of N1.767 trillion to help finance the 2024 Federal Budget.
The request was conveyed through a letter addressed to Senate President Godswill Akpabio and Speaker of the House of Representatives, Tajudeen Abbas, which was read during Tuesday’s plenary session.
If granted approval, the loan would partially cover the N9.7 trillion deficit outlined in the 2024 budget. President Tinubu noted that the request, which has already received approval from the Federal Executive Council (FEC), aligns with the Debt Management Office Act, particularly Sections 21(1) and 27(1).
In addition to the borrowing request, the president also submitted the 2025-2027 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) to the National Assembly, along with the National Social Investment Programme Establishment Amendment Bill. The bill aims to make the social register the central tool for implementing the federal government’s welfare programmes.
Last week, the Federal Government had also approved a separate $2.2 billion external borrowing plan.
The letter outlined three potential financing options to raise the necessary funds: Eurobonds, Sovereign Sukuk, and Bridge Finance/Syndicated Loans.
On Eurobonds, the president stated that Nigeria could raise part or all of the required funds through Eurobond sales in the International Capital Market (ICM). He pointed out that countries such as Côte d’Ivoire, Kenya, and Cameroon have successfully issued bonds in the ICM in 2024.
Regarding Sovereign Sukuk, the president indicated that a debut issuance worth $500 million is being considered, with credit enhancement support from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a member of the Islamic Development Bank Group.
In case of delays in the Eurobond market, the president mentioned the possibility of securing Bridge Finance or Syndicated Loans from international financial institutions like Citigroup, Goldman Sachs, and JPMorgan.
The government intends to pursue these financing options concurrently, with a focus on Eurobonds due to their speed and cost-effectiveness.
On the utilisation of the funds, President Tinubu explained that the proceeds would be used to support key infrastructure projects in sectors such as power, transportation, agriculture, and defense. Additionally, part of the funds will be deposited into the Central Bank of Nigeria’s account to bolster external reserves and stabilize the Naira.
