The Senate has approved the 2025-2026 external borrowing plan of $21.5 billion presented by President Bola Tinubu for consideration.
The Senate’s approval followed presentation of the report of Committee on Local and Foreign Debts at plenary by Chairman of the committee, Senator Aliyu Wamakko, on Tuesday, News Agency of Nigeria (NAN) reported.
Also approved by the senate was a loan request of 15 billion Japanese Yen and 65 million Euros grant.
The Senate also approved the issuance of a Federal Government Bond of N757 billion for payment of accrued rights pension arrears as of December 2023 for the Contributory Pension Scheme (CPS).
It equally approved President Bola Tinubu’s request of capital raising of up to two billion dollars through a foreign currency-denominated instrument in the domestic market.
Wamakko, in his report, said that the loan requests were part of the already approved Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) for the 2025 budget.
He said that MTEF and FSP contained most of the items in the borrowing plans.
The senator also said that, based on the findings, the committee recommended that the Senate approve the president’s request.
Senators express mixed reactions to new loans
Senator Solomon Adeola, who seconded the motion, said that the approval was largely a formality, as most of the items had already been outlined in the MTEF and 2025 budget previously passed by the National Assembly.
Adeola, who is the Chairman, Senate Committee on Appropriations, said:
“The borrowing is already embedded in the 2025 Appropriation Act.
“With this approval, we now have all revenue sources, including loans, in place to fully fund the budget,” he said.
Senator Sani Musa said that the borrowing plan covered a six-year disbursement period, not just the 2025 fiscal year, adding that Nigeria had not defaulted on any of its existing loan repayments.
“There’s no economy that grows without borrowing. What we are doing is in line with global best practices,” Musa said.
Senator Adetokunbo Abiru also said that the loan requests complied with the Fiscal Responsibility Act (FRA) and the Debt Management Act, stressing that the funds were for capital projects and human development.
“These loans are long-term, concessional, and come with favorable repayment terms. Some stretch between 20 and 35 years,” Abiru said.
However, Senator Abdul Ningi raised concerns that the committee, in its document, did not indicate how the loan would be repaid.
Ningi stressed the need for detailing how the loan being sought would be used to impact constituents, as people would ask them (lawmakers) how the funds were expended.
He said that the document failed to provide a specific breakdown on what each state or agency would receive and how the loans would be repaid.
“We need to tell our constituents exactly how much is being borrowed in their name, and for what purpose,” Ningi said, citing constitutional provisions regarding borrowing oversight.
However, Senator Victor Umeh expressed strong support for the plan, highlighting the provisions on investment in the eastern corridor.
“This is the first time I’ve seen three billion dollars allocated to rebuild the eastern rail line. That alone justifies my full support,” Umeh said.
Deputy Senate President, Jibrin Barau, who presided over the plenary, lauded the committee’s inputs.
According to him, the entire country is being carried along in the borrowing plan.
“This shows that the Renewed Hope Agenda is working; no region is left out.
“With the borrowing plan now approved, implementation of the 2025 Appropriation Act can begin in full,” he said.
Barau further stated that all the funds disbursed under the facility must be utilised strictly for capital and development projects, in line with the laws governing public finance.
What you should know
In May, President Tinubu requested the Senate to approve a new external borrowing plan of about $21.5 billion as part of the 2025-2026 borrowing plan.
Nigeria’s total public debt rose to N149.39 trillion as of March 31, 2025, marking a year-on-year increase of N27.72 trillion or 22.8% when compared to the N121.67 trillion recorded in the corresponding period of 2024.
