Tinubu seeks approval to borrow $20.5bn and €1.05bn for projects

President Bola Tinubu has asked the National Assembly to approve external loans totaling $20.5 billion ($20,517,755,901) and one billion Euros (€1,045,083,643) under the 2026, 2027 Supplementary External Borrowing Plan.

The president explained that these loans will support important projects in different areas, including infrastructure, agriculture, healthcare, education, water supply, security, and job creation, as well as financial management reforms.

Mr Tinubu’s request was made in a letter read by Senate President Godswill Akpabio during Tuesday's session.

In the letter, the president said the borrowing is key to supporting his administration’s reform agenda. He noted that the projects were chosen based on thorough technical and economic evaluations and their expected benefits for Nigeria's socio-economic growth.

"I want to emphasise that the projects and programmes included in the Borrowing Plan were selected based on thorough technical and economic evaluation, as well as their anticipated contribution to the socio-economic development of the country," he said.

Mr Tinubu added that the projects would create jobs, enhance skills, support entrepreneurship, reduce poverty, and improve food security, which would benefit the lives of Nigerian children.

He stated that most of the projects would be carried out across all 36 states and the Federal Capital Territory.

"These initiatives aim to generate employment, promote skills acquisition, foster entrepreneurship, reduce poverty and enhance food security, all of which improve the livelihood of the Nigerian child."

He continued, "In light of the need for significant infrastructure investment in the country and the vast financial resources needed to address this gap, it has become essential to pursue broader external borrowings to close the financing shortfall."

Mr Tinubu said the funds will focus on key infrastructure projects, especially in power, transportation, and healthcare.

"Given the urgent nature of these needs and the importance of stabilising the country, it is crucial to seek the consideration and approval of the National Assembly leadership and the entire National Assembly for the 2026, 2027 Supplementary External Borrowing Plan."

"This will enable the government to fulfil its obligations to the Nigerian people through timely disbursements and effective project implementation," he added.

After reading the letter, Mr Akpabio sent the request to the Senate Committees on Local and Foreign Debts and Appropriations for further examination. He asked the committees to report back within a week.

This latest request comes about five months after the National Assembly gave the green light to a $516.3 million loan from Deutsche Bank AG to help build the Sokoto, Badagry Superhighway, a major project under Tinubu’s Renewed Hope Agenda.

The loan has a nine-year term, including a grace period of up to three years, and an interest rate set at the Chicago Mercantile Exchange’s Secured Overnight Financing Rate (SOFR) plus 5.3 percent annually.

The loan is backed by insurance from the Islamic Corporation for the Insurance of Investment and Export Credit, which is the insurance branch of the Islamic Development Bank.

In March, the National Assembly also approved a $6 billion external borrowing plan for the federal government.

Out of that amount, $5 billion was to come from First Abu Dhabi Bank to support the national budget, while a $1 billion export finance facility from the UK, arranged by Citibank, was set aside for the repair of Tin Can Island Port and the Lagos Port Complex.

This latest borrowing request comes as worries about Nigeria’s rising public debt and the increasing cost of meeting government obligations grow.

Nigeria’s debt load has gone up in recent years as the federal government has depended on both local and foreign borrowing to cover budget gaps and finance infrastructure projects.

Even though Nigeria’s debt-to-GDP ratio is seen as moderate compared to some other countries, experts worry about the government’s limited income and its ability to meet debt obligations.

A large part of government revenue is used for debt servicing, which cuts down on money available for infrastructure, public services, and other important development needs.

The International Monetary Fund and the World Bank have repeatedly encouraged Nigeria to improve revenue collection and ensure that borrowed funds are used for investments that can generate economic returns.

The federal government insists that external borrowing is essential to fix the country’s infrastructure issues, fund development projects, and meet its budget obligations. Officials also say that borrowing on good terms can help manage financing costs and support economic growth.