Tinubu seeks Reps’ approval for $7.7bn external borrowing plan in 2026 budget

By GiftChapiOdekina, Abuja President Bola Ahmed Tinubu has written to the House of Representatives, seeking legislative approval for the implementation of the N10.79 trillion ($7.7 billion) external borrowing component of the 2026 Appropriation Act. The request, contained in a letter addressed to the Speaker of the House, Tajudeen Abbas, seeks approval to raise $7.707 billion at the budget exchange rate of N1,400 to the dollar to finance part of the Federal Government’s budget deficit.

However, the President clarified that the request does not constitute a fresh borrowing plan, explaining that the National Assembly had already approved the amount and made provision for it in the 2026 Appropriation Act. According to him, the current request is aimed at fulfilling the statutory requirements of Sections 21(1) and 27(1) of the Debt Management Office (DMO) Establishment Act, 2003, which require parliamentary approval of the terms and conditions governing external loans.

Tinubu explained that Section 21(1) prohibits the Minister of Finance from obtaining or approving external loans unless their terms and conditions have been presented to and approved by the National Assembly. He added that Section 27(1) empowers the National Assembly to approve standard terms and conditions for negotiating and accepting external loans and issuing guarantees.

The President recalled that the 2026 Appropriation Act provided for N29.218 trillion in new borrowings to finance the budget deficit, comprising N18.28 trillion in domestic borrowing and N10.79 trillion in external borrowing. He said the Federal Government would pursue multiple financing options simultaneously, taking into consideration their costs, benefits and the time required to access the funds.

Tinubu, however, indicated that greater emphasis would be placed on Eurobond issuance, which he said could be concluded more quickly and provide access to larger amounts of financing at relatively lower costs. On the proposed Eurobond issuance, the President noted that the final terms and conditions would be determined at the time of pricing, depending on prevailing market conditions.

He assured that the Federal Ministry of Finance and the Debt Management Office would work to secure the most favourable terms available in the international market. According to the letter, the external borrowing is intended to finance projects and programmes captured in the 2026 budget, particularly in priority sectors including defence and security, transportation, agriculture, power, education and health.

Tinubu said the borrowing would also support the administration’s efforts to stabilise and strengthen ongoing macroeconomic reforms. He further argued that the proceeds would contribute to the country’s external reserves, as the funds would be received by the Central Bank of Nigeria on behalf of the Federal Government, thereby supporting the naira exchange rate.

In the proposed resolution, the President asked the House to authorise the Federal Government to raise the N10.79 trillion external borrowing through one or more financing sources. These include conventional and commercial financing windows from multilateral and bilateral institutions, the International Monetary Fund, bridge financing facilities and direct borrowing from international institutions, with emphasis on Eurobond issuance.

He also sought authorisation for the Minister of Finance and Coordinating Minister of the Economy, in collaboration with the Debt Management Office, to take all necessary steps to implement the resolution once approved by the National Assembly. The President further stressed that the request was separate from his additional borrowing request, which remains before the legislature for consideration on its own merit.

He maintained that the present request neither supersedes nor withdraws the earlier request but relates specifically to the statutory authorisation required to implement the external borrowing already captured in the 2026 Appropriation Act.