President Bola Ahmed Tinubu has requested the Senate to approve a proposed external borrowing of 10.79 trillion naira to finance part of the 2026 budget deficit. This request was made in a letter dated October 26, 2026, addressed to the President of the Senate, Godswill Akpabio. The proposed borrowing is equivalent to 7.707 billion dollars at the budget exchange rate of 1,400 naira to one dollar.
The request is in compliance with Sections 21(1) and 27(1) of the Debt Management Office (Establishment, etc.) Act, 2003. This Act requires external loan terms and conditions to be submitted to and approved by the National Assembly. President Tinubu recalled that the 2026 Appropriation Act provided for total new borrowings of approximately 29.2 trillion naira, comprising 18.4 trillion naira in domestic borrowing and 10.79 trillion naira in external borrowing.
The Federal Government plans to raise the external borrowing through various funding sources. These include concessional and commercial facilities from multilateral and bilateral institutions, the International Monetary Fund, bridge financing facilities, loan syndications, and Eurobond issuance. President Tinubu stated that greater emphasis would be placed on Eurobonds due to the relatively shorter time required to conclude the process and the potential to raise substantial funds at comparatively lower costs.
The President noted that the final interest rates and other terms of the Eurobond issuance would be determined by prevailing market conditions at the time of pricing. He assured the Senate that the Federal Ministry of Finance and the Debt Management Office would work together to secure the most favourable borrowing terms for the country. This would ensure that Nigeria benefits from the borrowing while minimizing potential risks.
The proposed external borrowing would finance critical projects and programmes in the 2026 budget. These projects are particularly in the priority sectors of defence and security, transportation, agriculture, power, education, and health. President Tinubu added that the borrowing would help consolidate the administration’s macroeconomic reforms and sustain the gains recorded in recent years.
The President also explained that the proceeds would strengthen the country’s external reserves. The funds would be received by the Central Bank of Nigeria on behalf of the Federal Government, thereby providing support for the stability of the naira. This move is expected to have a positive impact on Nigeria's economy, particularly in terms of exchange rate stability and overall economic growth.
Following the presentation of the letter, the President of the Senate, Godswill Akpabio, referred the request to the Senate Committee on Local and Foreign Debts for further legislative consideration. The Committee is expected to report back as soon as practicable.
Key points
- President Tinubu requests Senate approval for a 10.79 trillion naira external borrowing to finance the 2026 budget deficit.
- The proposed borrowing is equivalent to 7.707 billion dollars at the budget exchange rate of 1,400 naira to one dollar.
- The external borrowing will finance critical projects in priority sectors such as defence, security, transportation, agriculture, power, education, and health.
