Senate Approves $21.5bn External Borrowing Plan for 2025–2026

By Iyojo Ameh

The Nigerian Senate has approved President Bola Tinubu’s external borrowing plan of $21.5 billion for the 2025–2026 fiscal period.

The approval followed the presentation of the report by Senator Aliyu Wamakko, Chairman of the Senate Committee on Local and Foreign Debt, during plenary in Abuja.

President Tinubu, in his request, explained that the loan is intended to fund critical development projects across vital sectors of the economy, including infrastructure, security, education, health, agriculture, and human capital development.

In addition to the $21.5 billion borrowing plan, the Senate also approved a loan request of 15 billion Japanese Yen, a grant of 65 million Euros, and an additional domestic borrowing of ₦757 billion through the issuance of Federal Government Bonds to settle pension arrears as of December 2023.

Furthermore, the Senate granted approval for the President to raise up to $2 billion via a foreign currency-denominated instrument in the domestic market.

According to Senator Wamakko, the borrowing requests are already captured in the Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) that form the basis of the 2025 budget. He recommended approval based on the committee’s findings.

Senator Solomon Adeola (APC–Ogun), who seconded the motion, described the approval as a formality, noting that the loans are already embedded in the 2025 Appropriation Act. As Chairman of the Senate Appropriations Committee, he emphasized that the approval enables the government to fully fund the budget.

Senator Sani Musa (APC–Niger) clarified that the loan disbursement spans a six-year period and not just the 2025 fiscal year. He stressed that borrowing is a global norm for economic growth and affirmed that Nigeria has not defaulted on its existing loans.

Senator Adetokunbo Abiru (APC–Lagos) assured the chamber that the loans comply with the Fiscal Responsibility Act and the Debt Management Act. He said the funds would be channeled toward capital projects and human development, noting that the facilities are long-term and concessional, with repayment periods ranging from 20 to 35 years.

However, Senator Abdul Ningi (PDP–Bauchi) expressed concern over the lack of clear repayment details in the committee’s report. He emphasized the importance of transparency, particularly in outlining how the borrowed funds would be allocated and repaid.

“We need to tell our constituents exactly how much is being borrowed in their name, and for what purpose,” he argued.

Senator Victor Umeh (LP–Anambra) voiced strong support for the borrowing plan, citing the allocation of $3 billion for the reconstruction of the eastern rail corridor as a key justification.

Presiding over the session, Deputy Senate President Jibrin Barau (APC–Kano) commended the committee’s work, noting that the plan includes projects across all regions of the country.

“This shows that the Renewed Hope Agenda is working; no region is left out,” he said.

With the Senate’s approval, full implementation of the 2025 budget can commence, with a strict requirement that all funds must be used solely for developmental and capital projects, in line with public finance laws.