President Bola Tinubu has asked the National Assembly to approve a fresh external borrowing of $2.3bn, alongside plans to issue Nigeria’s first international sovereign Sukuk worth $500m, marking the country’s debut in the global Islamic finance market.
The request, contained in a letter read by Speaker Tajudeen Abbas on the floor of the House of Representatives on Tuesday, was made in line with Sections 21(1) and 27(1) of the Debt Management Office Establishment Act, 2003.
According to Tinubu, the loan is part of the government’s 2025 fiscal framework and is aimed at financing the 2025 Appropriation Act, refinancing maturing Eurobonds, and expanding Nigeria’s debt portfolio to include Islamic finance instruments.
“The 2025 fiscal framework anticipates $9.27bn in new borrowings to address the budget deficit,” the President wrote, “of which $1.84bn is earmarked for external sources at an assumed exchange rate of N1,500 to the dollar.”
Refinancing Maturing Eurobonds
Tinubu explained that the borrowing would be sourced through Eurobonds, syndicated loans, bridge financing, or multilateral institutions, depending on market conditions.
A central part of the plan is the refinancing of Nigeria’s $1.118bn Eurobond, issued in 2018 at a 7.625% interest rate and due in November 2025.
“This is standard practice in debt capital markets,” Tinubu noted. “Refinancing through Eurobonds or syndicated loans will guarantee debt sustainability and boost investor confidence.”
He described the move as a necessary step to maintain Nigeria’s fiscal credibility and ensure a smooth rollover of maturing obligations.
Nigeria’s Debut in Global Islamic Finance
In what would be a milestone for Nigeria’s capital market, the President also announced plans to issue a $500m sovereign Sukuk internationally — the country’s first.
Since 2017, domestic Sukuk issuances have raised over N1.39tn, funding major infrastructure projects including federal highway construction and rehabilitation. Tinubu said the international Sukuk would “deepen Nigeria’s presence in the global Islamic finance market” and help bridge the infrastructure financing gap.
To make the offering more attractive, the government is exploring a credit enhancement guarantee from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a member of the Islamic Development Bank Group.
“If the ICIEC credit guarantee is utilised, 25% of the proceeds will be used to repay relatively expensive debt obligations, while the balance will finance pre-identified infrastructure projects,” Tinubu explained.
Balancing Growth and Debt
Tinubu assured lawmakers that the Ministry of Finance and the Debt Management Office would appoint reputable transaction advisers to secure favourable pricing and terms, amid volatile global market conditions.
He also expressed confidence in Nigeria’s record as a “consistent and credible issuer” in international capital markets, arguing that the proposed transactions would reinforce investor trust while ensuring prudent fiscal management.
The new borrowing request comes as Nigeria faces mounting pressure to finance a widening budget deficit and manage its rising debt profile, even as it seeks to drive growth through infrastructure investment.
Analysts say the twin strategy — refinancing costly Eurobonds and expanding into Islamic finance — signals a shift toward more diversified and cost-efficient borrowing.
Nigeria’s success with domestic Sukuk issuances has already showcased the potential of Islamic finance to support real-sector development. Extending this model internationally, especially with an ICIEC-backed guarantee, could lower borrowing costs, enhance Nigeria’s credit standing, and attract a new class of global investors.
If approved by the National Assembly, the initiative would underscore Tinubu’s broader fiscal strategy: using innovative financing tools to stabilise public debt, fund critical infrastructure, and maintain confidence in Africa’s largest economy amid global uncertainty.
