Lawmakers endorse $500m Sovereign Sukuk for infrastructure projects as Nigeria’s debt hits ₦97 trillion amid fiscal strain….
The Nigerian Senate has approved President Bola Tinubu’s request to obtain $2.847 billion in new external loans, including a $500 million debut Sovereign Sukuk, aimed at financing part of the 2025 budget deficit and refinancing the country’s maturing Eurobonds.
The approval followed the consideration of a report by the Senate Committee on Local and Foreign Debts, chaired by Senator Wamakko Magatarkada Aliyu (APC, Sokoto North). The committee reviewed Tinubu’s proposal titled “New External Borrowing and Refinancing.”
According to the breakdown, $2.347 billion will be sourced from the international capital market to help fund the 2025 budget, while $500 million from the Sukuk bond will support key infrastructural projects across Nigeria.
Rising Debt, Growing Debate
The Senate’s decision comes amid renewed public concern over Nigeria’s mounting debt stock, which the Debt Management Office (DMO) places at ₦97 trillion as of mid-2025. Critics argue that persistent borrowing could worsen the country’s fiscal position, but government officials maintain that strategic debt remains vital for sustaining growth, bridging infrastructure gaps, and maintaining investor confidence.
President Tinubu had earlier, in a letter read on the Senate floor on October 8, 2025, sought legislative backing for the new loans as part of his administration’s broader plan to finance priority projects and manage existing obligations under the 2025 fiscal framework.
Lawmakers Defend Borrowing Plan
Presenting the committee’s report, Senator Wamakko said the borrowing plan was critical to ensuring economic stability, continuity of key projects, and maintaining Nigeria’s international credit reputation.
He explained that the funds would enable the federal government to meet its 2025 financing needs without disrupting ongoing fiscal commitments.
Supporting the motion, Senator Sani Musa (APC, Niger East), Chairman of the Senate Committee on Finance, emphasized that the approval was essential for the smooth execution of the 2025 Appropriation Bill.
“We must give approval to this request so that the 2025 budget will get the necessary funding,” Musa stated.
Also weighing in, Senator Adetokunbo Abiru (APC, Lagos East), who chairs the Senate Committee on Banking, Insurance, and Other Financial Institutions, clarified that the borrowing would not worsen Nigeria’s debt burden, describing it instead as a budget compliance measure.
“This is more of a compliance issue because the 2025 Appropriation Act has already captured it as part of the deficit financing. The second request is a refinancing arrangement to ensure the country does not default on Eurobond servicing,” Abiru explained.
On his part, Senator Adams Oshiomhole (APC, Edo North), Chairman of the Senate Committee on Interior, defended the move, arguing that properly managed loans could stimulate growth and create jobs.
“There’s nothing wrong with borrowing if it’s properly structured and directed toward solving critical issues like unemployment and infrastructure decay,” Oshiomhole said.
Looking Ahead
The Senate’s endorsement marks another key step in President Tinubu’s drive to stabilize Nigeria’s fiscal position ahead of the 2025 financial year. However, the government still faces challenges of declining revenues and rising debt-servicing costs, both of which continue to test the resilience of Africa’s largest economy.
About the Author
