2026 budget: Tinubu seeks fresh Senate approval for $7.7bn external loan

From Adesuwa Tsan, Abuja

President Bola Tinubu has sought fresh approval from the Senate to borrow $7.707 billion, equivalent to N10.79 trillion, from external sources to finance part of the Federal Government’s 2026 budget deficit, effectively replacing an earlier request for $20.52 billion and €1.045 billion in foreign loans.

The fresh request, contained in a letter dated October 26, 2026, was read during plenary on Wednesday by Senate President Godswill Akpabio, who explained that the revised proposal superseded the borrowing request presented to the National Assembly on October 27.

Akpabio said the latest communication provided greater clarity on the proposed financing arrangements, including the different sources from which the Federal Government intends to raise the funds, and would enable the country to negotiate more favourable borrowing terms.

The proposed $7.707 billion borrowing forms part of the N29.2 trillion in new loans provided for in the 2026 Appropriation Act, comprising N18.4 trillion in domestic borrowing and N10.79 trillion to be sourced externally.

Tinubu, in the letter, explained that the Federal Government intended to raise the external component through a combination of financing options, including Eurobond issuance, concessional and commercial facilities from multilateral and bilateral institutions, International Monetary Fund (IMF) facilities, bridge financing and syndicated loan arrangements.

The President said the government would explore the various options simultaneously, taking into consideration the cost of borrowing, the potential benefits to the country and the time required to access the funds.

He, however, indicated that greater emphasis would be placed on Eurobond issuance because of the relatively shorter time required to complete such transactions and the possibility of raising substantial funds at comparatively lower costs.

“All the options will be pursued simultaneously, considering the costs and related benefits to the country and the time required to access the funds.

“In view of this, emphasis will be on the issuance of Eurobonds, which is typically faster to conclude. Additionally, a large amount can be raised through Eurobonds at a relatively lower cost,” Tinubu stated.

The President explained that the final interest rates, repayment periods and other conditions attached to the proposed borrowing would be determined by prevailing international financial market conditions at the time the facilities were priced.

He assured lawmakers that the Federal Ministry of Finance and the Debt Management Office (DMO) would work together to secure the most favourable borrowing terms available to Nigeria.

According to him, the external financing was necessary to support the implementation of critical projects and programmes captured in the 2026 Appropriation Act, particularly those intended to strengthen economic growth, infrastructure development and the administration’s ongoing macroeconomic reforms.

Tinubu listed defence and security, transportation, agriculture, power, education and healthcare among the priority sectors expected to benefit from the proposed borrowing.

“The new external borrowings are required to implement the items, programmes and projects in the 2026 Appropriation Act, which are designed to consolidate and strengthen the macroeconomic reforms and gains recorded by this administration in the past few years,” the President stated.

He maintained that the financing would enable the Federal Government to implement development programmes considered essential to improving infrastructure, strengthening national security and supporting economic activities across the country.

The President also argued that the borrowing would contribute to strengthening Nigeria’s external reserves and supporting the stability of the naira, explaining that the foreign currency proceeds would be received by the Central Bank of Nigeria (CBN) on behalf of the Federal Government.

“It is also important to add that the process will increase the accretion to the external reserves, since the funds will be received by the Central Bank of Nigeria on behalf of the Federal Government, thereby supporting the naira exchange rate,” he said.

Tinubu anchored the request on Sections 21(1) and 27(1) of the Debt Management Office (Establishment, etc.) Act, 2003, which provide the statutory framework for legislative approval of external borrowing and the consideration of the terms and conditions attached to such facilities.

He specifically requested the National Assembly to authorise the Federal Government to raise N10.79 trillion, equivalent to approximately $7.707 billion at the 2026 budget exchange rate of N1,400 to the dollar.

The President equally sought legislative approval empowering the Minister of Finance and Coordinating Minister of the Economy, working in collaboration with the DMO, to take the necessary steps to implement the proposed borrowing arrangements.

Speaking after the letter was read, Akpabio explained that the fresh communication effectively replaced the earlier borrowing request of $20.52 billion and €1.045 billion submitted by the President under the 2026–2027 Supplementary External Borrowing Plan.

“I believe this letter effectively cancels the earlier request that was sent for $20-something billion. But this is much more explicit,” the Senate President said.

Akpabio observed that the revised proposal provided a clearer framework for raising the funds, particularly by allowing the Federal Government to explore multiple financing sources rather than depending on a single lender or borrowing arrangement.

He explained that such flexibility would enable the government to assess offers from different international lenders and financial institutions before settling for arrangements considered most favourable to Nigeria.

“This also takes cognisance of the fact that the borrowing is not going to take effect from only one location. So we have to go out there and search for the best terms, what we may call a willing-seller, willing-buyer approach,” Akpabio stated.

The Senate President subsequently referred the request to the Senate Committee on Local and Foreign Debts for detailed legislative consideration.

The committee is expected to scrutinise the financing options, proposed borrowing arrangements, repayment conditions and other obligations associated with the facilities before reporting its findings to the Senate as soon as practicable.

The fresh request comes barely a week after Tinubu sought legislative approval for $20.52 billion and €1.045 billion in external loans to finance projects and programmes in infrastructure, agriculture, healthcare, education, water supply, security, employment generation and financial management reforms.

The earlier proposal, presented to the Senate on October 27, had been referred for legislative scrutiny, but Akpabio’s clarification on Wednesday indicated that the new $7.707 billion request would now guide the chamber’s consideration of the Federal Government’s external borrowing requirements under the 2026 budget.

The Senate is expected to take a final decision on the revised borrowing proposal after receiving the report of its Committee on Local and Foreign Debts.

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