President Bola Ahmed Tinubu has formally requested approval from the National Assembly to secure a fresh external loan of $7.7 billion to part-finance the Federal Government’s ₦31.4 trillion budget deficit for the 2026 fiscal year. The request was contained in a letter dated October 26, 2026, and addressed to the Senate President. The letter was read on the floor of the upper legislative chamber during Wednesday’s plenary.
The proposed borrowing is calculated at the budget benchmark exchange rate of ₦1,400 to the United States dollar. The request complies with Sections 21(1) and 27(1) of the Debt Management Office (Establishment, etc.) Act, 2003, which mandates legislative approval for all external debt transactions. Under the 2026 Appropriation Act, total new borrowings stand at ₦29.2 trillion to bridge the projected budget gap.
The $7.7 billion request represents the full external borrowing component of the act. President Tinubu stated that the 2026 Appropriation Act approved the sum of ₦29.2 trillion as new borrowings to part-finance the 2026 budget deficit of about ₦31.4 trillion. The President outlined the financing strategy, revealing that while the government will explore multiple international windows simultaneously, primary emphasis will be placed on Eurobond issuance.
President Tinubu emphasized that Eurobonds are typically faster to conclude and can raise a larger amount at a relatively lower cost. The Federal Ministry of Finance and the Debt Management Office (DMO) will negotiate the most favorable interest rates and repayment tenors based on prevailing market conditions at the time of pricing. The loan proceeds will support vital infrastructure and developmental programmes critical to national economic stability.
Priority areas slated for funding include Defence and Security, transportation, agriculture, power, education, and healthcare. The President noted that the incoming foreign currency will be received by the Central Bank of Nigeria (CBN) on behalf of the Federal Government, thereby boosting Nigeria’s foreign reserves, stabilizing the naira, and reinforcing macroeconomic reforms.
Reacting to the letter, the Senate President, Godswill Akpabio, said the letter effectively cancels the earlier request for about $20 billion. The Senate President remarked that the new request is much more explicit and takes cognizance of the fact that the borrowing is not going to be taken at once. The proposal has been committed to the Debt Committee for further consideration.
The committee’s report is expected back on the Senate floor as soon as practicable. Public debate continues over Nigeria’s debt sustainability and fiscal management. The Minister of Finance and Coordinating Minister of the Economy, alongside the DMO, are expected to execute the debt issuance once final approval is granted by the National Assembly.
Key points
- President Tinubu requests $7.7bn loan to finance 2026 budget deficit
- The loan will support vital infrastructure and developmental programmes
- The proposal has been committed to the Senate's Debt Committee for further consideration
