By Sabiu Abdullahi
The Senate has commenced consideration of President Bola Tinubu’s request to obtain an external loan of $7.7 billion, equivalent to approximately ₦10.79 trillion, as part of the Federal Government’s financing plan for the 2026 fiscal year.
The request was referred to the Senate Committee on Local and Foreign Debts on Wednesday for detailed examination, with the committee directed to submit its report as soon as practicable.
Tinubu’s request was contained in a letter dated October 26, 2026, and addressed to the President of the Senate, Godswill Akpabio.
The letter sought legislative approval to borrow $7,707,404,882.49, equivalent to ₦10,790,366,835,481, using the budget exchange rate of ₦1,400 to the dollar.
The proposed external borrowing forms part of the ₦29.2 trillion new borrowing provision in the 2026 Appropriation Act, which comprises ₦18.4 trillion in domestic loans and ₦10.79 trillion in external financing.
According to the President, the borrowing is intended to help finance the projected ₦31.4 trillion budget deficit for the year.
Tinubu said the proposal complies with Sections 21(1) and 27(1) of the Debt Management Office (Establishment, etc.) Act, 2003, which require external borrowing proposals to receive approval from the National Assembly.
Eurobonds to receive priority
The President explained that the government would explore several financing options, taking into account borrowing costs, the benefits of each arrangement and the time required to secure the funds.
However, he indicated that greater attention would be given to Eurobond issuance because of its relatively faster processing and capacity to raise substantial funds.
Other options listed in the letter include concessional and commercial loans from multilateral and bilateral institutions, facilities from the International Monetary Fund, bridge financing, loan syndications and direct borrowing from international financial institutions.
Tinubu acknowledged that the final interest rates, repayment periods and other conditions would depend on market conditions at the time the financing arrangements are concluded.
He assured lawmakers that the Federal Ministry of Finance and the Debt Management Office would work together to negotiate favourable terms for Nigeria.
Sectors to benefit from the loan
The President said the proposed funds would support projects and programmes captured in the 2026 budget, particularly in defence and security, transportation, agriculture, power, education and healthcare.
He argued that the additional financing would provide resources for implementing key budgetary programmes and sustaining the administration’s economic reforms.
Tinubu also said the foreign currency proceeds would be received by the Central Bank of Nigeria on behalf of the Federal Government, thereby contributing to the country’s external reserves.
According to him, the expected increase in reserves would provide additional support for the naira and strengthen Nigeria’s external position.
Akpabio urges favourable borrowing terms
Reacting to the request, Senate President Godswill Akpabio stressed the need for the government to negotiate favourable conditions and carefully examine the economic implications of any borrowing agreement.
He cautioned against accepting loan arrangements without considering their costs and repayment obligations.
Akpabio subsequently referred the proposal to the Committee on Local and Foreign Debts for further scrutiny before the Senate takes a final decision.
The request comes amid continuing concerns over Nigeria’s rising public debt, debt-servicing obligations and reliance on borrowing to finance annual budget deficits.
While the Federal Government maintains that borrowing is necessary to address revenue shortfalls and fund infrastructure and development projects, questions remain about the sustainability of the country’s debt profile and the capacity of borrowed funds to generate returns that justify their cost.
The Daily Reality