President Bola Tinubu has asked the National Assembly to approve a new external loan of $2.3 billion and permission to issue a $500 million sovereign Sukuk, marking Nigeria’s first entry into the international Islamic finance market.
The request was contained in a letter read by Speaker Tajudeen Abbas on the floor of the House of Representatives on Tuesday. Tinubu’s proposal complies with Sections 21(1) and 27(1) of the Debt Management Office Establishment Act, 2003.
According to the President, the new borrowing plan will help fund the 2025 Appropriation Act, refinance maturing Eurobonds, and expand Nigeria’s debt options to include Islamic finance products.
“The 2025 fiscal framework anticipates $9.27 billion in new borrowings to address the budget deficit, of which $1.84 billion is earmarked for external sources at an assumed exchange rate of ₦1,500 to the dollar,” Tinubu explained.
He said the funds would be raised through a mix of Eurobonds, syndicated loans, bridge financing, or direct loans from multilateral institutions to reduce costs and manage risks effectively.
A key part of the plan is to refinance Nigeria’s $1.118 billion Eurobond, issued in 2018 at 7.625% interest, which will mature in November 2025.
“This is a standard practice in debt capital markets. Refinancing through Eurobonds or syndicated loans will guarantee debt sustainability and boost investor confidence,” Tinubu wrote.
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The President also outlined plans to issue a $500 million sovereign Sukuk internationally, following the success of domestic Sukuk bonds that have raised ₦1.39 trillion since 2017 for major road and infrastructure projects.
“The international Sukuk will help bridge Nigeria’s infrastructure funding gap and attract a wider range of investors,” he added.
Tinubu further revealed that the government was exploring a credit enhancement guarantee from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), part of the Islamic Development Bank Group, to strengthen the bond’s credibility.
“If the ICIEC credit guarantee is utilised, 25% of the proceeds will be used to repay relatively expensive debt obligations, while the balance will finance pre-identified infrastructure projects,” the President stated.
The National Assembly is expected to debate and decide on the request in the coming days.