Tinubu Seeks House Approval for $2.35bn External Loan, $500m Sovereign Sukuk to Fund 2025 Budget and Infrastructure

By: Israel Adeleke 

OPEN TELEVISION NAIJA (OTN) News reports that President Bola Ahmed Tinubu has written to the House of Representatives seeking approval to obtain a total of $2.35 billion in external loans and issue a $500 million sovereign Sukuk to finance Nigeria’s 2025 budget deficit and critical infrastructure projects.

OTN News further reports that the president’s request was contained in a letter titled “Request for the Resolution of the National Assembly to Implement New External Borrowing in the 2025 Appropriation Act, Refinance Maturity Eurobonds and Issue Debut Sovereign Sukuk in the International Capital Market”, dated September 22, 2025, and read on the floor of the House by Speaker Abbas Tajudeen.

According to the letter, the proposed borrowing includes a new external loan of ₦1.84 trillion (equivalent to $1.23 billion at an exchange rate of ₦1,500 to $1) to partly finance the 2025 budget deficit. 

Tinubu urged the lawmakers to pass a resolution authorising the federal government to raise the funds through any of the following options: issuance of Eurobonds, bridge finance facility from bookrunners, loan syndication, or direct borrowing from international financial institutions.

He also requested approval to refinance maturing Eurobonds worth $1.12 billion issued in November 2018, which are due to mature in November 2025. 

Tinubu explained that the refinancing plan is intended to prevent default and ensure prudent debt management.

“This is a standard practice in debt capital markets, including the International Capital Market (ICM),” the president stated. “The proposal is for the House of Representatives to issue its resolution authorising the federal government to refinance the Eurobonds accordingly.”

In addition, Tinubu is seeking approval for the issuance of a debut stand-alone sovereign Sukuk worth up to $500 million in the international market, with or without a credit enhancement guarantee. 

He said the issuance would help diversify Nigeria’s funding sources and deepen the federal government’s securities market.

Highlighting the success of domestic Sukuk bonds, the president disclosed that between September 2017 and May 2025, the Debt Management Office (DMO) raised ₦1.39 trillion through Sukuk to fund key road infrastructure projects. 

He added that expanding into the international market was necessary to bridge Nigeria’s infrastructure financing gap.

Tinubu explained that the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a member of the Islamic Development Bank (IsDB) Group, had offered to provide a guarantee for the Sukuk issuance at a policy premium of 3.5% of the issue amount per annum.

“If the credit enhancement from ICIEC is taken, 25% of the issue proceeds may be used to repay relatively more expensive debt obligations, while the balance will fund pre-identified infrastructure projects,” the letter stated.

The total amount proposed to be raised—$2.35 billion in external borrowing and $500 million in Sukuk—would be sourced through Eurobonds, bridge financing, loan syndication, or direct international borrowing, subject to prevailing market conditions.

Tinubu assured the lawmakers that the Federal Ministry of Finance and the DMO would work with transaction advisers to secure the most favourable terms for Nigeria.

The president concluded by urging the House of Representatives to pass a resolution approving the proposed external capital raising, refinancing, and debut Sukuk issuance to support the government’s fiscal and infrastructural development plans for 2025.