President Bola Ahmed Tinubu has withdrawn his earlier request to the National Assembly for approval to process external loans worth $20.52 billion and €1.045 billion, replacing it with a new $7.7 billion borrowing proposal to partly finance Nigeria’s 2026 budget deficit.
The development followed a fresh letter dated October 26, 2026, which was read by Senate President Godswill Akpabio during plenary on Wednesday, November 4.
The revised proposal seeks approval for external borrowing of $7,707,404,882.49, equivalent to approximately N10.79 trillion at the 2026 budget exchange rate of N1,400 to one dollar.
According to the President, the latest request supersedes the earlier external borrowing proposal presented to the National Assembly on October 27.
Akpabio confirmed the development, explaining that the new communication provided greater clarity about the government’s borrowing requirements and the different financing options available.
Following the presentation, the Senate President referred the request to the Senate Committee on Local and Foreign Debts for further consideration and directed the committee to report back as soon as practicable.
The development marks a significant adjustment to the Federal Government’s external financing proposal as it seeks additional funds to implement projects and programmes contained in the 2026 Appropriation Act.
How the $7.7 Billion Loan Fits Into the 2026 Budget
In his letter to the Senate, Tinubu explained that the 2026 Appropriation Act provided for N29.2 trillion in new borrowing to partly finance the Federal Government’s budget deficit, estimated at approximately N31.4 trillion.
The approved borrowing arrangement consists of two major components: domestic and external financing.
Under the arrangement, N18.4 trillion is expected to be sourced from domestic borrowing, while N10.79 trillion will come from external sources.
The proposed $7.7 billion foreign borrowing represents the external component of the approved financing plan.
The President explained that the funds would support the implementation of priority projects and programmes already captured in the 2026 budget.
These areas include defence and security, transportation, agriculture, power, education and healthcare.
The administration maintains that the proposed financing will help address infrastructure gaps, support economic activities and strengthen the country’s development objectives.
Government Identifies Multiple Sources of Foreign Financing
Tinubu disclosed that the Federal Government intends to explore several financing options to raise the proposed $7.7 billion.
The options include Eurobond issuance, concessional and commercial loans from multilateral and bilateral financial institutions, International Monetary Fund facilities, direct borrowing from international financial institutions and bridge financing arrangements.
According to the President, these options will be pursued simultaneously, taking into consideration their respective costs, benefits and the time required to access the funds.
However, the government intends to place greater emphasis on Eurobond issuance.
Tinubu explained that Eurobond transactions are generally faster to conclude and could allow Nigeria to raise substantial amounts of money under relatively competitive borrowing conditions.
He also noted that the final terms of the proposed borrowing, including interest rates and repayment periods, would depend on prevailing market conditions when the funds are raised.
The Federal Ministry of Finance and the Debt Management Office are expected to work together to ensure that Nigeria secures favourable terms.
The government will therefore assess the available financing channels before deciding on the most suitable combination for raising the required funds.
Government Says Borrowing Could Support the Naira
Another important aspect of the proposal is its potential impact on Nigeria’s external reserves and foreign exchange stability.
Tinubu explained that the proceeds from the external borrowing would be received by the Central Bank of Nigeria on behalf of the Federal Government.
According to the President, the expected increase in external reserves could provide additional support for the country’s foreign exchange position and contribute to the stability of the naira.
However, the actual impact will depend on the amount raised, the timing of the inflows and prevailing conditions in the foreign exchange market.
The government believes that improved access to external financing could also support the implementation of its economic reform agenda.
Senate Begins Scrutiny as Debt Concerns Remain
The revised borrowing request comes amid continuing discussions about Nigeria’s public debt, debt-servicing obligations and the government’s reliance on borrowing to finance budget deficits.
Although the Federal Government has maintained that borrowing is necessary to fund critical infrastructure and development projects, concerns remain about the country’s ability to manage rising debt obligations.
The Senate’s consideration of the proposal will therefore be important in determining the conditions under which the government can access the proposed funds.
The National Assembly’s approval is required before the Federal Government can proceed with the external borrowing arrangements under the applicable provisions of the Debt Management Office Establishment Act, 2003.
By referring the request to the relevant committee, the Senate has commenced the legislative review process. The proposal has not yet received final approval.
The committee is expected to examine the borrowing plan and report its findings to the Senate before further legislative action.
For now, the Federal Government’s revised proposal represents a shift from its earlier $20.52 billion and €1.045 billion external borrowing request to a more clearly defined $7.7 billion financing plan.
The outcome of the Senate’s review will determine the next stage of the government’s efforts to secure the external funds required to support the 2026 budget.
