2026 Budget: Tinubu Asks House of Reps to Approve N10.79tn External Borrowing

President Bola Ahmed Tinubu has approached the House of Representatives for approval to raise $7.707 billion, equivalent to N10.79 trillion, through external borrowing to finance part of the Federal Government’s 2026 budget deficit.

The request, contained in a letter sent to the Speaker, Tajudeen Abbas, seeks legislative approval for the implementation of the external borrowing component already captured in the 2026 Appropriation Act.

Using the budget exchange rate of N1,400 per dollar, the proposed borrowing amounts to approximately $7.7 billion.

Tinubu stressed that the request should not be interpreted as a new borrowing proposal, noting that the National Assembly had previously approved the amount as part of the 2026 budget.

He explained that the fresh correspondence was intended to secure the statutory authorisation required under Sections 21(1) and 27(1) of the Debt Management Office Establishment Act, 2003.

The provisions require the terms and conditions of external loans to be submitted to the National Assembly for approval before the Minister of Finance can obtain or approve such facilities.

The President explained that Section 21(1) specifically bars the Finance Minister from securing external loans unless their terms and conditions have first been presented to and approved by lawmakers.

He further cited Section 27(1), which empowers the National Assembly to approve standard conditions for negotiating and accepting external loans, including the issuance of guarantees.

According to Tinubu, the 2026 Appropriation Act made provision for total new borrowings of N29.218 trillion to finance the budget deficit.

The borrowing plan consists of N18.28 trillion in domestic loans and N10.79 trillion in external financing.

He said the government would consider different funding arrangements at the same time, assessing their financial implications, advantages and the period required to access the funds.

The President, however, expressed a preference for Eurobond issuance, explaining that it could be concluded within a shorter period and provide access to substantial financing at comparatively lower costs.

Tinubu noted that the final terms and conditions of the proposed Eurobond would depend on market realities at the time of pricing.

He assured the House that the Ministry of Finance and the Debt Management Office would work towards securing the best possible terms from the international financial market.

The proposed external borrowing is expected to support projects and programmes contained in the 2026 budget, particularly those covering defence and security, transportation, agriculture, electricity, education and healthcare.

Tinubu also said the funds would help sustain and strengthen the administration’s ongoing macroeconomic reform programme.

He argued that the borrowing could provide additional support for Nigeria’s external reserves, as the proceeds would be received by the Central Bank of Nigeria on behalf of the Federal Government, potentially helping to stabilise the naira exchange rate.

In his proposed resolution, the President asked lawmakers to authorise the government to obtain the N10.79 trillion through one or several external financing arrangements.

The options outlined include conventional and commercial facilities from multilateral and bilateral lenders, the International Monetary Fund, bridge financing facilities and direct loans from international institutions. Eurobond issuance was identified as a major financing option.

Tinubu also sought approval for the Minister of Finance and Coordinating Minister of the Economy, in conjunction with the Debt Management Office, to undertake all necessary actions to implement the borrowing arrangement once the National Assembly grants approval.

The President further clarified that the request was not connected to another additional borrowing proposal previously submitted to the legislature, which is still awaiting consideration.

He said the latest request does not supersede or withdraw the earlier proposal, stressing that its purpose is specifically to obtain the legal approval needed to implement the external borrowing already approved under the 2026 Appropriation Act.

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