HOR : PBAT Seeks Approval For Fresh Foreign Loans Of $2.34b

President Bola Tinubu has sought the approval of the House of Representatives to take fresh foreign loans totalling $2.34 Billion dollars for part financing of deficit in the 2027 Appropriation Act.

The breakdown, according to the letter, are $1,229,113,000 new external borrowing, at the exchange rate of USD1 to N1,500 and $1,118,352,000.00 for refinancing of Eurobonds due to mature on November 21, 2025.

Also, President Tinubu is seeking the permission of the House to issue a stand-alone “debut Sovereign Sukuk“ of up to $500 million in the International Capital Market (ICM).

Speaker Abba Tajudeen who read the letter on the floor of the House said the request was made in accordance with the provisions of Sections 21(1) and 27(1) of the Debt Management Office (DMO) Establishment Act 2003.

According to the president, the total external capital to be raised amounts to $2.347 billion, comprising $1.229 billion in new external borrowing provided for in the 2025 Appropriation Act and $1.118 billion.

He further stated that the money was to refinance maturing Eurobonds due in November.

President Tinubu said the borrowing would be sourced through a mix of Eurobond issuance, loan syndications, bridge financing and direct borrowing from international financial institutions, depending on market conditions.

He said the new financing was part of the government’s strategy to support infrastructure development, refinance costly debt obligations and sustain investor confidence in Nigeria’s credit market.

The president sought the legislature’s authorisation for the issuance of a stand-alone $500 million sovereign Sukuk in the international capital market — the first of its kind for Nigeria.

He said the Sukuk would diversify Nigeria’s funding sources, attract investors and complement domestic Sukuk issuances that had raised over $1.39 trillion since 2017 for critical road projects across the country.

“The proposed Sukuk may be issued with or without a credit enhancement guarantee from the Islamic Corporation for Insurance of Investment and Export Credit (ICIEC) — member of the Islamic Development Bank Group.

“Under the plan, up to 25 percent of the proceeds could be used to refinance high-cost government debts, while the balance will fund pre-identified infrastructure projects”, he said.

Tinubu assured that the refinancing of the maturing $1.118 billion dollar Eurobonds due in November was a standard practice in global debt management, aimed at avoiding default and maintaining market credibility.

He affirmed the willingness of the Federal Ministry of Finance and the Debt Management Office to collaborate with transaction advisers to ensure the most favourable market terms and conditions at the time of issuance.

Oduyemi Odumade, Edited By Grace Namiji