Tinubu Seeks Senate Approval for $516m New Loan

Tinubu Seeks Senate Approval for $516m New Loan

JOEL OLADELE, Abuja

President Bola Ahmed Tinubu has approached the Senate for approval to secure a fresh $516.33 million external loan, adding to a series of borrowings undertaken by his administration to finance key national priorities.

The request, contained in a letter read on the floor of the upper chamber on Thursday by Senate President Godswill Akpabio, seeks legislative backing for a syndicated facility expected to be arranged by Deutsche Bank AG.

Tinubu explained that the loan would fund specific phases of a major infrastructure corridor spanning about 1,000 kilometres across several states, linking economic zones in the North-West and South-West. He noted that the Federal Executive Council had already endorsed the financing structure and urged lawmakers to expedite approval.

According to details of the proposal, the facility will run for nine years, including a grace period of up to three years, with interest benchmarked to the Secured Overnight Financing Rate (SOFR) plus 5.3 per cent annually.

The President argued that the project would enhance connectivity, reduce transportation costs and support trade flows by easing movement between production hubs and major markets.

The latest request comes amid a broader borrowing pattern by the Tinubu administration aimed at plugging fiscal gaps and funding capital projects in the face of revenue constraints.

In July 2025, the Senate approved a sweeping external borrowing plan exceeding $21 billion to support the 2025–2026 budget cycle, covering sectors such as infrastructure, health, education and security.

Earlier in October 2025, the National Assembly also cleared a $2.85 billion foreign borrowing plan, which included Nigeria’s debut sovereign sukuk in international markets as part of efforts to diversify funding sources.

That same period, the administration sought to raise about $2.8 billion through a mix of loans and bond issuances, including $2.3 billion in new borrowings and a $500 million sukuk instrument.

In November 2025, lawmakers approved additional domestic borrowing of about ₦1.15 trillion to bridge a widening budget deficit, further underscoring the government’s reliance on debt financing.

Multilateral support has also featured in the borrowing mix, with the African Development Bank indicating plans to extend a $500 million facility to Nigeria as part of a broader budget support programme tied to ongoing economic reforms.

Analysts say the steady recourse to borrowing reflects the administration’s strategy of using debt to stimulate growth and fund infrastructure, even as fiscal pressures persist following subsidy removal and exchange rate reforms.

With the latest $516 million request now before lawmakers, attention will turn to the Senate Committee on Foreign and Local Debts, which is expected to review the proposal and report back for consideration.