President Bola Tinubu Seeks House of Representatives’ Approval for Multi-Billion Dollar Borrowing Plans to Boost Nigeria’s Economy
In a significant move aimed at accelerating Nigeria’s economic growth and addressing critical infrastructure deficits, President Bola Ahmed Tinubu has officially written to the House of Representatives requesting approval for three major financial proposals involving both external and domestic borrowing. These borrowing plans collectively amount to billions of dollars, euros, and naira and are expected to fund pivotal sectors such as infrastructure development, job creation, and social welfare.
The details of these borrowing initiatives were formally presented in letters read during the plenary session on Tuesday by the Speaker of the House, Abbas Tajudeen. The President’s letter highlights three distinct proposals that require legislative backing, namely:
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The federal government’s external borrowing rolling plan for the years 2025–2026.
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A $2 billion foreign currency bond issuance in the domestic financial market.
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The issuance of government bonds worth N757.98 billion to settle outstanding pension liabilities under the Contributory Pension Scheme (CPS).
Legal Basis for Borrowing Requests
President Tinubu underscored that these borrowing requests are grounded in Nigeria’s fiscal laws and executive mandates. Specifically, he cited the Fiscal Responsibility Act of 2007 and a Presidential Executive Order signed in October 2023 as the legal framework guiding these proposals.
In his letter, the President emphasized:
“This request is pursuant to the provisions of Section 44 (1) and (2) of the Fiscal Responsibility Act 2007 and Section 1(7) of the Executive Order, which requires National Assembly approval for all new borrowings and appropriation of the proceeds.”
This insistence on compliance with existing laws not only ensures transparency but also reinforces the necessity of legislative oversight before the federal government can access new funds.
Purpose and Strategic Focus of Borrowings
According to the President, the funds to be raised from these borrowings will be invested strategically to stimulate growth, develop infrastructure, create jobs, and boost Nigeria’s foreign exchange earnings. These goals align with the government’s broader economic strategy to diversify funding sources, stabilize the naira currency, and deepen the domestic financial market.
The President explained:
“The proceeds will be invested in critical sectors of the economy to drive growth, infrastructure development, job creation, and foreign exchange earnings. This strategy aims to diversify government funding sources, stabilize the naira, and deepen the local financial market.”
However, the President also candidly acknowledged the downside of increasing Nigeria’s public debt stock. He warned that the borrowing will inevitably raise the nation’s debt servicing costs, highlighting the need for prudent management of the borrowed funds.
External Borrowing Plan: $21.5 Billion and €2.2 Billion for Priority Projects
One of the most notable components of the borrowing requests is the detailed external borrowing plan for the 2025–2026 period. President Tinubu proposed raising external loans amounting to $21.5 billion, €2.2 billion, 15 billion Japanese yen, as well as €65 million in grants.
These funds are earmarked for priority projects across several vital sectors, including infrastructure, agriculture, healthcare, education, water supply, security, and employment generation. The emphasis on infrastructure highlights the government’s intent to tackle Nigeria’s longstanding deficits in roads, power, railways, and other essential services.
The President affirmed:
“These projects were selected based on technical and economic evaluations and are geared toward addressing the country’s infrastructure deficit, reducing poverty, creating jobs, and boosting food security.”
He further noted that the benefits of these projects would be felt nationwide, spanning all 36 states as well as the Federal Capital Territory (FCT), ensuring a more equitable distribution of development.
Economic Context: Subsidy Removal and Revenue Challenges
President Tinubu contextualized the need for this borrowing plan by pointing to the impact of subsidy removal on domestic revenue streams and the urgent need to close the financial gaps hampering development efforts.
He stressed:
“Given the impact of subsidy removal and dwindling domestic revenues, it is imperative to close the financial gap through prudent external borrowing.”
This candid admission reflects the government’s acknowledgment of Nigeria’s current fiscal challenges, while also reinforcing the rationale for seeking foreign loans targeted at high-impact sectors such as power, railways, and healthcare.
Domestic Bond Issuance to Clear Pension Liabilities: N757.98 Billion
In a third critical financial request, President Tinubu appealed to the House of Representatives to approve the issuance of Federal Government of Nigeria (FGN) bonds worth N757.98 billion in the domestic market. These bonds will be used specifically to offset outstanding pension liabilities under the Contributory Pension Scheme (CPS) as of December 31, 2023.
The President explained that this move is necessary due to long-standing challenges in meeting pension obligations arising from revenue constraints. Over the years, the government has not fully complied with several provisions of the Pension Reform Act (PRA) 2014, leading to the accumulation of unpaid pension benefits.
President Tinubu stated:
“This bond issuance will enable the federal government to meet its obligations to retirees, restore confidence in the pension system, and improve the welfare of retired public servants.”
By addressing this pension backlog, the government aims to restore trust and stability within the public sector’s pension framework, an essential step to safeguarding retirees’ welfare.
Expected Economic Benefits of Clearing Pension Arrears
Beyond simply fulfilling legal obligations, the President highlighted that clearing pension arrears through bond issuance would have positive ripple effects across the economy.
He said:
“Clearing the pension backlog would enhance liquidity in the economy and have a positive effect on public sector morale.”
This suggests that timely pension payments could increase consumer spending among retirees, thus stimulating economic activity. It also boosts morale among public servants, which can improve productivity and reduce unrest linked to unpaid benefits.
Importantly, this proposal had already been approved by the Federal Executive Council in February 2025, demonstrating executive branch alignment behind this initiative.
Next Steps: Legislative Review and Oversight
All three borrowing proposals have been formally submitted pursuant to relevant fiscal and pension laws and have been referred to the House Committee on Finance for detailed scrutiny and further legislative action.
The involvement of the National Assembly is critical as it provides constitutional checks and balances over the government’s borrowing plans, ensuring transparency, accountability, and that the borrowed funds are judiciously deployed.
Conclusion
President Bola Tinubu’s recent letter to the House of Representatives marks a pivotal moment in Nigeria’s economic policy direction. The multi-billion-dollar borrowing plan, encompassing external loans, domestic bond issuance, and pension bond funding, reflects the government’s commitment to addressing infrastructure deficits, supporting social welfare, and stabilizing the nation’s financial markets.
While these borrowings will increase Nigeria’s public debt, the President’s emphasis on legal compliance, targeted investment in priority sectors, and measures to restore pension system confidence demonstrate a balanced approach designed to boost economic growth, create jobs, and improve citizens’ quality of life.
As the House Committee on Finance undertakes its review, Nigerians and investors alike will watch closely to see how these proposals unfold and contribute to the country’s economic transformation over the next few years.
