By Tracy Moses
President Bola Ahmed Tinubu has written to the House of Representatives, seeking approval to implement the N10.79 trillion external borrowing component of the 2026 Appropriation Act.
In a letter addressed to the Speaker of the House, Tajudeen Abbas, the President explained that the request was intended to secure the statutory authorisation required to access the funds already approved as part of the financing arrangements for the 2026 budget deficit.
Tinubu stressed that the request did not constitute a fresh borrowing plan, noting that the amount had already been approved by the National Assembly and provided for in the 2026 Appropriation Act.
According to the President, the proposed external borrowing of N10,790,366,835,481, equivalent to $7.707 billion at the budget exchange rate of N1,400 to the dollar, forms part of the total approved new borrowing of N29.218 trillion.
The approved borrowing comprises N18.28 trillion in domestic loans and N10.79 trillion in external borrowing.
Tinubu said the request was being made pursuant to Sections 21(1) and 27(1) of the Debt Management Office (DMO) Establishment Act, 2003.
Section 21(1) provides that no external loan shall be obtained or approved by the Minister of Finance unless its terms and conditions have been laid before the National Assembly and approved by a resolution.
Similarly, Section 27(1) empowers the National Assembly to approve, through resolutions, standard terms and conditions for the negotiation and acceptance of external loans and the issuance of guarantees.
The President explained that the Federal Government intended to pursue available borrowing options simultaneously, taking into account their costs, benefits and the time required to access the funds.
He, however, indicated that greater emphasis would be placed on Eurobond issuance, which he said was typically faster to conclude and could enable the country to raise substantial funds at relatively lower costs.
“All options will be pursued simultaneously considering the cost benefit to the country as well as the time required to access the funds. In view of this, emphasis will be on the issuance of Eurobonds which is typically faster to conclude,” he stated.
On the terms and conditions of the proposed Eurobond issuance, Tinubu explained that these would be determined by prevailing market conditions at the time of pricing.
He assured lawmakers that the Federal Ministry of Finance and the DMO would work together to secure the most favourable terms available in the international market.
The President further stated that the external borrowing would finance projects, programmes and priority interventions contained in the 2026 Appropriation Act, particularly in defence and security, transportation, agriculture, power, education and healthcare.
He also highlighted the potential impact of the borrowing on the country’s foreign exchange position, explaining that the proceeds would be received by the Central Bank of Nigeria on behalf of the Federal Government to boost external reserves and support exchange-rate stability.
Consequently, Tinubu requested the House to adopt a resolution authorising the Federal Government to implement the N10.79 trillion external borrowing plan through one or more funding sources.
These include conventional and commercial financing windows from multilateral and bilateral institutions, facilities from the International Monetary Fund, bridge financing arrangements and direct borrowing from international institutions, with greater emphasis on Eurobond issuance.
He also sought authorisation for the Minister of Finance and Coordinating Minister of the Economy, in collaboration with the DMO, to take all necessary steps to give effect to the National Assembly’s resolution.
Clarification on the Scope of the Request
In a separate clarification accompanying the request, the President reiterated that the proposal should not be interpreted as a fresh borrowing plan.
He explained that the N10.79 trillion external borrowing component had already been approved by the National Assembly as part of the overall financing framework for the 2026 budget.
The clarification stated that the request was intended to fulfil the statutory requirements of Sections 21(1) and 27(1) of the DMO Act, which provide for legislative consideration and approval of the terms and conditions governing external loans.
It further stressed that the request was distinct from the President’s separate borrowing proposal before the National Assembly and did not supersede or withdraw that submission.
According to the clarification, the other borrowing request remains subject to legislative consideration on its own merits.
The President maintained that the current communication was strictly concerned with obtaining the statutory authorisation required to implement the external borrowing already provided for in the 2026 Appropriation Act.