Tinubu to Borrow Fresh $2.3bn for 2025 Budget Via Eurobonds, Sukuk

By Adedapo Adesanya

President Bola Tinubu is seeking approval for a fresh external borrowing of $2.3 billion to implement the 2025 Appropriation Act, refinance maturing Eurobonds, and expand Nigeria’s debt instruments to include Islamic finance products.

This is in addition to a plan to issue a $500 million sovereign Sukuk, which will mark Nigeria’s debut in the international Islamic finance market.

On Tuesday, the President forwarded the request, contained in a letter and read on the floor of the House of Representatives by the Speaker, Mr Tajudeen Abbas, in line with Sections 21(1) and 27(1) of the Debt Management Office Establishment Act, 2003.

President Tinubu noted that “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 N1,500 to the Dollar.”

He explained that the external borrowing would be sourced through various instruments, including Eurobonds, syndicated loans, bridge financing, or direct loans from multilateral institutions — in order to optimise cost and manage risk effectively.

A key element of the plan is the refinancing of Nigeria’s $1.118 billion Eurobond, issued in 2018 at a coupon rate of 7.625 per cent and due in November 2025.

“This is a standard practice in debt capital markets,” the President wrote. “Refinancing through Eurobonds or syndicated loans will guarantee debt sustainability and boost investor confidence.”

He maintained that refinancing maturing obligations was part of routine debt management and vital for maintaining Nigeria’s fiscal credibility.

The President’s letter also revealed a plan to issue a $500 million sovereign Sukuk internationally, a move aimed at deepening Nigeria’s presence in the Islamic finance market.

The initiative follows the success of domestic Sukuk issuances, which have raised N1.39tn since 2017 to fund critical infrastructure projects such as major road construction.

The government is also exploring a credit enhancement guarantee from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a member of the Islamic Development Bank Group (IsDB), to strengthen the offering.

“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 said.

He assured lawmakers that the Federal Ministry of Finance and the Debt Management Office would engage reputable transaction advisers to secure the best pricing and terms amid volatile global market conditions.

Mr Tinubu further expressed confidence in Nigeria’s reputation as a consistent and credible issuer in international capital markets, noting that the proposed transactions would reinforce investor trust and ensure prudent fiscal management.

The development has raised worries about Nigeria’s debt threshold, which stood at near N150 trillion as of mid-2025.