By Kazeem Waris
President Bola Ahmed Tinubu has asked the House of Representatives to approve the Federal Government’s proposed $7.7 billion (N10.79 trillion) external borrowing component of the 2026 Appropriation Act, opening a fresh legislative phase in the administration’s funding strategy.
In a letter addressed to Speaker of the House, Tajudeen Abbas, the President sought authorisation to raise $7.707 billion at the budget exchange rate of N1,400 to the dollar to finance part of the Federal Government’s budget deficit.
Tinubu, however, moved to pre-empt concerns over additional debt accumulation, insisting that the request does not represent a fresh borrowing plan but is intended to secure the statutory approval required to implement an amount already captured in the 2026 budget.
The President explained that the request was necessary to comply with Sections 21(1) and 27(1) of the Debt Management Office (DMO) Establishment Act, 2003, which require the National Assembly to approve the terms and conditions governing external loans.
Under Section 21(1), the Minister of Finance cannot obtain or approve external loans unless their terms and conditions have been presented to and approved by the National Assembly. Section 27(1) also empowers lawmakers to approve standard terms for negotiating and accepting external loans and issuing guarantees.
The President recalled that the 2026 Appropriation Act provided for N29.218 trillion in new borrowings to finance the budget deficit, comprising N18.28 trillion in domestic borrowing and N10.79 trillion in external borrowing.
But beyond securing legislative approval, the administration appears to be placing significant emphasis on international capital markets, particularly Eurobond issuance, as a major route for raising the required funds.
Tinubu told lawmakers that the Federal Government would explore multiple financing options simultaneously, weighing their costs, benefits and the time required to access the funds.
He identified Eurobond issuance as a preferred option, noting that it could be concluded more quickly and provide access to larger amounts of financing at relatively lower costs.
On the proposed Eurobond, the President said the final terms and conditions would be determined at the point of pricing, depending on prevailing market conditions.
He assured the lawmakers that the Ministry of Finance and the Debt Management Office would work together to secure the most favourable terms available in the international market.
The proposed external borrowing is expected to finance projects and programmes captured in the 2026 budget, particularly in strategic sectors including defence and security, transportation, agriculture, power, education and healthcare.
Tinubu said the financing would also support the administration’s efforts to stabilise and strengthen ongoing macroeconomic reforms.
Another major consideration outlined in the letter is the potential impact of the external borrowing on Nigeria’s foreign exchange position.
According to the President, the proceeds would be received by the Central Bank of Nigeria on behalf of the Federal Government, potentially contributing to the country’s external reserves and supporting exchange-rate stability.
In the proposed resolution, Tinubu asked the House to authorise the Federal Government to raise the N10.79 trillion external borrowing through one or more financing sources.
These include conventional and commercial financing windows from multilateral and bilateral institutions, the International Monetary Fund, bridge financing facilities and direct borrowing from international institutions, with particular emphasis on Eurobond issuance.
He also requested authorisation for the Minister of Finance and Coordinating Minister of the Economy, working with the Debt Management Office, to take all necessary steps to implement the resolution once approved by the National Assembly.
However, the President was careful to distinguish the request from another additional borrowing proposal currently before the legislature.
He stressed that the present request does not supersede or withdraw the earlier proposal, which remains before lawmakers for consideration on its own merit.
The latest development places the National Assembly at the centre of another major decision on Nigeria’s public debt strategy, as lawmakers consider the financing terms for a substantial portion of the Federal Government’s 2026 spending programme.
The key question before the legislature is whether to grant the requested authorisation and under what financing conditions, particularly as the government seeks to balance budget implementation, infrastructure financing, foreign exchange stability and the cost of servicing external debt.
