President Bola Tinubu has asked the House of Representatives to approve the terms and conditions for accessing the ₦10.79 trillion external borrowing provided for in Nigeria’s 2026 budget, as the Federal Government moves to secure foreign financing for its planned projects and programmes.
The request, which covers approximately $7.71 billion at the budget exchange rate of ₦1,400 to the dollar, came in a letter addressed to the Speaker of the House, Tajudeen Abbas, and read during Wednesday’s plenary session.
Tinubu explained that the proposed financing would help the government meet part of its budget deficit and implement projects captured in the 2026 Appropriation Act. He also stated that the request followed the requirements of Sections 21(1) and 27(1) of the Debt Management Office (DMO) Establishment Act, 2003.
These provisions require the Federal Government to present the terms and conditions of external loans to the National Assembly for approval before proceeding with the borrowing arrangements.
The President noted that the 2026 budget provided for ₦29.218 trillion in new borrowing to finance the government’s expenditure plans. The amount comprises ₦18.28 trillion in domestic borrowing and ₦10.79 trillion in external financing.
₦10.79 Trillion External Borrowing: Government Considers Eurobonds
In his communication to lawmakers, Tinubu explained that the government would pursue different financing options simultaneously while considering their costs, benefits and the time required to secure the funds.
However, he indicated that the administration would place greater emphasis on Eurobond issuance because the process typically takes less time and could help Nigeria raise substantial funds through international capital markets.
The President also identified other potential sources of financing, including conventional and commercial lending facilities from multilateral and bilateral institutions, International Monetary Fund facilities, bridge financing arrangements and direct borrowing from international financial institutions.
According to the proposal, the government would assess the available options before deciding which arrangements offer the most favourable conditions for the country. Tinubu added that the final interest rates and other terms attached to any Eurobond issuance would depend on prevailing international market conditions when the government approaches investors.
He assured lawmakers that the Ministry of Finance and the Debt Management Office would work together to negotiate favourable terms and manage the process of securing the funds.
Funds to Support Key Sectors and Budget Projects
Tinubu further explained that the proposed external financing would support projects and programmes already captured in the 2026 budget, particularly those targeting infrastructure development and essential public services.
The sectors identified in the President’s request include defence and security, transportation, agriculture, power, education and healthcare, which remain important areas of government expenditure and development planning.
He also argued that the foreign currency proceeds could strengthen Nigeria’s external reserves and provide additional support for the naira. According to the President, the Central Bank of Nigeria would receive the funds on behalf of the Federal Government.
However, the actual impact on the country’s foreign reserves and exchange rate will depend on the structure of the financing, the timing of disbursement and how the government manages the proceeds.
The proposed arrangement also places attention on the borrowing costs, repayment schedules and conditions that international lenders may attach to the facilities.
Reps Explain Why Presidential Approval Is Necessary
Following the presentation of the presidential letter, Speaker Tajudeen Abbas clarified that the request did not represent an entirely new borrowing proposal, as the National Assembly had already captured the ₦10.79 trillion external financing component in the 2026 Appropriation Act.
He explained that the President was seeking the additional legislative resolution required under the DMO Act to implement the borrowing and agree on the conditions attached to the external loans.
The clarification distinguishes budgetary approval for borrowing from the statutory approval required to negotiate and obtain the external facilities. Although lawmakers had already provided for the amount in the annual budget, the government still needed to satisfy the legal requirements governing external loans.
Abbas also explained that the latest request remained separate from another borrowing proposal previously submitted by the President. He stressed that the two matters would receive independent consideration from the National Assembly.
The development comes amid continued scrutiny of Nigeria’s public debt, budget financing requirements and the government’s reliance on domestic and foreign loans to meet expenditure commitments.
As the House considers the request, attention will remain on the conditions attached to the proposed facilities, the cost of servicing the loans and the government’s ability to translate the borrowed funds into completed projects.
The outcome of the legislative process will determine the next step in the Federal Government’s effort to access the external borrowing component of the 2026 budget.
