ABUJA — The Senate on Wednesday commenced scrutiny of President Bola Tinubu’s request to secure a $7.707 billion (₦10.79 trillion) external loan, referring the proposal to its Committee on Local and Foreign Debts for detailed evaluation.
The proposed borrowing forms a key part of the Federal Government’s financing strategy to bridge an estimated ₦31.4 trillion budget deficit for the 2026 fiscal year. Contained in a letter dated October 26, 2026, and read during Wednesday’s plenary, the executive request seeks legislative approval to raise ₦10,790,366,835,481 (equivalent to $7,707,404,882.49) based on the budget exchange rate benchmark of ₦1,400 to the dollar.
President Tinubu outlined multiple financing channels in his letter, including concessional and commercial facilities from multilateral and bilateral institutions, International Monetary Fund (IMF) facilities, bridge financing, loan syndications, and direct bank borrowing. However, he emphasized that primary focus would be placed on Eurobond issuances due to their faster execution speed and capacity to raise large capital blocks efficiently.
On the utilization of the proceeds, the President explained that the external funding will support critical capital projects under the 2026 Appropriation Act, with priority allocated to defence and security, transportation, power, agriculture, education, and healthcare. Furthermore, he noted that foreign currency proceeds would be received by the Central Bank of Nigeria (CBN), leading to an accretion in external reserves that will strengthen Nigeria’s foreign exchange position and support the naira.
Acknowledging that final interest rates, tenors, and loan conditions will depend on market dynamics at the time of pricing, President Tinubu assured lawmakers that the Ministry of Finance and the Debt Management Office (DMO) will negotiate to secure the most favorable conditions available.
Reacting to the request, Senate President Godswill Akpabio directed the debt committee to examine the proposed terms thoroughly and report back as soon as practicable. Akpabio cautioned against accepting rigid loan conditions without evaluating their long-term economic impact and repayment obligations, stressing that negotiators must pursue a “win-win” outcome for the country.
The legislative review comes amid persistent public scrutiny over Nigeria’s growing public debt stock and rising debt-servicing obligations, balancing the government’s infrastructure financing needs against ongoing concerns regarding long-term fiscal sustainability.