The Senate has approved President Bola Tinubu’s request to borrow N1.15 trillion from the domestic debt market to finance the deficit in the 2025 Appropriation Act.
The approval followed the adoption of the report of the Senate Committee on Local and Foreign Debts, presented during Wednesday’s plenary by the committee’s Vice Chairman, Senator Manu Haruna.
Presenting the report, Senator Haruna explained that the 2025 Appropriation Act, passed at N59.99 trillion, reflected an increase of N5.25 trillion from the N54.74 trillion initially proposed by the executive.
The increase, he noted, widened the budget deficit to N14.10 trillion, while the approved borrowing provision of N12.95 trillion created an unfunded gap of N1.147 trillion.
He said that the increase created a budget deficit of N14.10 trillion, saying that the proposed borrowing approval in the budget was N12.95 trillion, which occasioned an unfunded deficit of N1.147 trillion.
He said it was, therefore, necessary to increase the domestic limit in the 2025 budget by N1.147 to close the gap.
Senate urges Finance Ministry, DMO to follow its guidelines strictly
Senate, after approval of the loan request, urged the Federal Ministry of Finance and Debt Management Office to undertake the borrowing strictly within approved fiscal parameters, ensuring that all terms and conditions are favourable, transparent and sustainable.
It also mandated the Committee on Local and Foreign Debt to oversee the implementation and utilisation of proceeds from the approved borrowing.
It urged the committee to receive quarterly reports from the Ministry of Finance and Debt Management Office on the status, utilisation and repayment plans, monitor compliance with debts, sustainability, threshold and fiscal responsibility.
It also urged the committee to review the implementation and utilisation of proceeds from the approved fiscal parameters
It further mandated the committee on appropriation to ensure that the borrowing was actually used for the purpose for which it is required to fund the deficit in the 2025 appropriation bill
Backstory
On November 4, President Tinubu requested the approval of the Senate for a fresh N1.15 trillion domestic loan to help finance the deficit in the 2025 budget.
Tinubu emphasized that the domestic borrowing would form part of the administration’s broader fiscal strategy to stimulate economic growth, enhance infrastructure investment, and strengthen social programs aimed at improving citizens’ welfare.
What you should know
In July, the Senate approved the 2025-2026 external borrowing plan of $21.5 billion presented by President Tinubu for consideration.
The Senate also approved the issuance of a Federal Government Bond of N757 billion for the payment of accrued rights pension arrears as of December 2023 for the Contributory Pension Scheme (CPS).
