Senate approves President Tinubu’s $21 billion external borrowing plan

Senate has approved President Bola Tinubu’s plan for more than $21 billion in foreign borrowing to plug shortfalls in the 2025 budget, a senior lawmaker said late on Tuesday. Tinubu asked the National Assembly to approve the borrowing in May. “With this approval we now have all revenue sources, including loans, in place to fully fund the budget,” Solomon Adeola, Senate chair on appropriations, told reporters. The approval also includes loans of 4 billion euros ($4.70 billion) and 15 billion yen ($102.26 million), a $65 million grant as well as $2 billion dollar-denominated borrowing at home. The money is earmarked for infrastructure, healthcare, education, security and housing. Some $3 billion has been allocated to revamp a 2,044 kilometre (1,270.08 miles) narrow-gauge line along Nigeria’s eastern rail corridor. Since taking office in 2023, Tinubu has initiated bold economic reforms, including ending costly fuel subsidies and devaluing the naira, to stimulate growth. Instead the measures have fuelled inflation and triggered a cost of living crisis. The borrowing reflects Tinubu’s shift toward fiscal expansion to stimulate growth, despite limited revenue. The House of Representatives is expected to approve the plan on Wednesday.
It will be recalled that the Senate in May approved the 2025-2026 external borrowing plan of $21.5 billion presented by President Bola Tinubu for consideration. It approved the requests following the presentation of the report of Committee on Local and Foreign Debts at plenary on Tuesday by the Chairman of the committee, Sen. Aliyu Wamakko (APC-Sokoto). The Senate also approved the request for 15 billion Japanese Yen loan and 65 million Euros grant as well as the issuance of Federal Government Bond of N757 billion for payment of accrued pension arrears of pensioners under the Contributory Pension Scheme (CPS). The senate also approved the request of capital raising of up to two billion dollars through a foreign currency-denominated instrument in the domestic market. President Bola Tinubu, while presenting the request before the National Assembly, said the loans to fund various critical national development projects across key sectors of the economy. Wamakko said that the loan requests were part of the already approved Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) for the 2025 budget.
He said that MTEF and FSP contained most of the items in the borrowing plans. The senator said the committee recommended that the senate should approve the president’s request based on the findings of the committee. Sen. Solomon Adeola (APC-Ogun) seconded the motion, saying the approval was largely a formality, as most of the items had already been outlined in the MTEF and 2025 budget previously passed by the National Assembly. Adeola, the Chairman of the Senate Committee on Appropriations, said the borrowings had already been embedded in the 2025 Appropriation Act. “With this approval, we now have all revenue sources, including loans, in place to fully fund the budget,” he said. Sen. Victor Umeh (LP-Anambra) expressed strong support for the plan, highlighting the provisions on investment in the eastern corridor. This is the first time I’ve seen three billion dollars allocated to rebuild the eastern rail line, that alone justifies my full support,” Umeh said. Deputy Senate President, Jibrin Barau (APC-Kano), who presided over the plenary, lauded the committee’s inputs. According to him, the entire country is being carried along in the borrowing plan. This shows that the Renewed Hope Agenda is working; no region is left out. With the borrowing plan now approved, implementation of the 2025 Appropriation Act can begin in full,” he said. Barau further stated that all the funds disbursed under the facility must be utilised strictly for capital and development projects, in line with the laws governing public finance.