President Tinubu asks Senate to approve $7.7bn external loan to cover budget gap

President Bola Tinubu has formally asked the Nigerian Senate to endorse an external borrowing programme amounting to US$7.7 billion. The request was presented to Senate leaders after the president’s earlier proposal for a US$20.52 billion loan was withdrawn. At the current exchange rate of N1,400 per dollar, the new borrowing would translate to roughly N10.79 trillion.

According to the Senate President, the revised loan request is intended to partially finance the country’s N20.2 trillion budget deficit. The proposal has been referred to the Senate’s Committee on Local and Foreign Debts for further consideration and legislative action.

Background

The initial borrowing request of US$20.52 billion was put forward by the Tinubu administration in the week preceding the current submission. The larger figure was intended to address the same fiscal shortfall but was later superseded by the smaller, revised amount. The president’s re‑election campaign for the 2027 polls has been noted alongside the borrowing request, though no direct link between the two has been made in the source material.

The Senate’s Committee on Local and Foreign Debts is responsible for scrutinising external borrowing proposals, assessing their impact on national debt sustainability and ensuring compliance with legislative requirements. The committee’s review follows standard parliamentary procedure for large‑scale financial authorisations.

Why it matters

Nigeria’s budget deficit of N20.2 trillion represents a significant fiscal challenge for the government, requiring external financing to sustain public spending. Approval of the US$7.7 billion loan would provide immediate resources to bridge the shortfall, potentially stabilising cash flows for essential services and development projects.

The borrowing also has implications for Nigeria’s debt profile. At an estimated N10.79 trillion, the loan would add to the nation’s external debt obligations, influencing future debt‑service payments and credit ratings. Stakeholders, including the Senate and fiscal watchdogs, are likely to assess the loan’s terms, interest rates and repayment schedule to gauge long‑term sustainability.

What happens next

The borrowing request now awaits deliberation by the Senate Committee on Local and Foreign Debts. The committee is expected to conduct hearings, evaluate the proposal’s merits and potential risks, and subsequently report its findings to the full Senate. Following committee review, the Senate will vote on whether to grant approval for the external loan. No specific dates for these proceedings have been provided in the source material.