JONAS EZIEKE, Abuja
President Bola Tinubu has written to the House of Representatives asking for the approval of N$2.34 Billion in External Borrowing and an additional $500 Million in Sovereign Sukuk funds in the international capital market for tackling the deficit on the 2025 annual budget
In a letter dated 22nd September 2025 and addressed to the Speaker of the House Rt Hon Tajudeen Abass, the number one citizen said that the borrowing is aimed at financing part of the 2025 budget deficits and refinancing maturing Eurobond
He said: “the purpose of this letter is to seek a Resolution of the House of Representatives pursuant to the provisions of Sections 21(1) and 27(1) of the Debt Management Office (Establishment, Etc.) Act, 2003 to:
i. Implement the New External Borrowing of #1,843,669,786,987.16 (equivalent of USD1,229,113,000.00 at the Budget Exchange Rate of USD1.00/N1,500.00) in the 2025 Appropriation Act for the part-financing of the Budget Deficit;
ii. refinance the USD1,118,352,000.00 Eurobonds (7.625% USD1.118BN NOV 2025) maturing on November 21, 2025;
iii. access aggregate external capital of USD2,347,465,000.00 (USD1.229bn and USD1.118bn), through any of the following option(s) in the International Capital Market (ICM): Issuance of Eurobonds, Loan Syndications, Bridge Finance Facility from Bookrunners and Direct Borrowing from International Financial Institutions; and,
iv. Issue a stand-alone debut Sovereign Sukuk of up to USD500m in the ICM with or without credit enhancement (Guarantee).
The President further hinted on the external borrowing of $2.34 billion saying the fund is for the implementation of New External Borrowing in the 2025 Appropriation Act
“The House of Representatives may wish to note that 2025 Appropriation Act provides for N9,276,348,934,935.79 as New Borrowings to part-finance the 2025 Budget Deficit, of which #1,843,669,786,987.16 (equivalent of about USD1,229,113,000.00 at the Budget Exchange Rate of USD1.00/N1,500.00) is specified as New External Borrowing. Table 1 shows the breakdown of the New Borrowings in the 2025 Budget.
The House of Representatives is kindly invited to issue its Resolution allowing the Government to raise the amount through any of the following options: Issuance of Eurobonds, Bridge Finance Facility from Bookrunners, Loan Syndication and Direct Borrowing from International Financial Institutions,” he said
Giving a further breakdown of the funds being sought from the House, he said that New Domestic Borrowing amounts to N7,432,679,147,948.63 while New External Borrowing amounts to N1,843,669,786,987.16 bring up a total sum of N9,276,348,934,935.79
Furthermore, on the refinancing of maturing Eurobonds of USD1.118 billion
The House of Representatives is to note that Eurobonds of USD1,118,352,000.00 (7.625% US$1.118BN NOV 2025) issued in the ICM on November 21, 2018, with an original tenor of 7 years, will mature on November 21, 2025.
The plan is to refinance the maturing Eurobonds through issuance of Eurobonds, Bridge Finance Facility from Bookrunners, Loan Syndication, or Direct Borrowing from International Financial Institutions, if necessary to avoid default.
The proposal is for the House of Representatives to issue its Resolution authorising the FGN to refinance the Eurobonds, accordingly.
Accordingly, based on the presentations, the aggregate amount proposed to be raised in the international capital market either through the Issuance of Eurobonds, Bridge Finance Facility from Bookrunners, Loan Syndication and Direct Borrowing from International Financial Institutions or a combination of the options for which Resolution of the House of Representatives is being sought is USD2,347,465,000.00.
Tinubu explained that whilst exploring all the options, the plan is to focus on the Issuance of Eurobonds, and he believes that Nigeria, being a regular issuer of Eurobonds in the ICM could raise the proposed amount, subject to market conditions.
The House of Representatives is further to note that because Eurobonds Issuance is a market-based transaction, the terms and conditions can only be determined at the time of the transactions, and they will be subject to prevailing market conditions.
The Federal Ministry of Finance (FMF) and the Debt Management Office (DMO) will work with the Transaction Advisers to secure the most favourable terms and conditions.
Meanwhile, it is expected that the pricing of the new Eurobonds will reflect the Yields on Nigeria’s Eurobonds trading in the ICM at the time of Issuance, while Tenors will be guided by investors’ preferences, price and the DMO’s liability management strategy.
Accordingly the House of Representatives is invited to issue its Resolution authorising the Issuance of a stand-alone debut Sovereign Sukuk of up to USD500m in the ICM based on the following reasons, amongst others:
The President explained that the Federal Government of Nigeria FGN has recorded considerable success in the Issuance of Sukuk in the domestic capital market for the development of critical infrastructure projects across the country.
Between September 2017 and May 2025, the DMO has raised N1,392.557 trillion through Sukuk in the domestic capital market to fund critical road infrastructure projects.
The President said that there is the need to pool resources from external sources to complement domestic issuance to help bridge infrastructure funding gaps; and,
He added that it is imperative to open new sources of funding for the FGN, and thereby diversify investor base, as well as deepen the FGN Securities market.
This proposal he pointed out is for the House of Representatives to approve the issuance of a stand-alone debut Sovereign Sukuk with or without credit enhancement (Guarantee) from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a member of the Islamic Development Bank (IsDB) Group.
The Indicative Term Sheet provided by ICIEC in respect of the credit enhancement .
The Policy Premium for the Guarantee proposed by ICIEC is 3.5% of Issue Amount per annum.
If the credit enhancement from ICIEC is taken for the proposed Sukuk Issuance, 25% of the Issue Proceeds may be used to repay relatively more expensive debt obligations of the FGN, and the balance will be used to finance the development of pre-identified infrastructure projects.
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