Abuja, Nigeria
The Nigerian Senate has officially approved President Bola Ahmed Tinubu’s request to secure approximately $21 billion in external loans to finance key projects outlined in the federal government’s 2025–2026 Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP).
The approval, granted during plenary on Tuesday, July 22, 2025, follows a detailed review by the Senate Committee on Local and Foreign Debts. The borrowing plan also includes provisions for €4 billion in Euro-denominated loans, ¥15 billion in Japanese yen, and $65 million in grants. In addition, the Senate approved provisions for domestic borrowing through ₦757 billion in government bonds and an option to raise an additional $2 billion through foreign or domestic instruments.
Purpose of the Borrowing Plan
According to the report presented by Senator Haruna Manu, Chairman of the Committee on Local and Foreign Debts, the borrowing plan is intended to finance critical projects across various sectors including infrastructure, agriculture, security, power, housing, water resources, education, and digital economy initiatives.
One of the major infrastructure projects listed for funding is the Eastern Rail Corridor, connecting Port Harcourt to Maiduguri, with an estimated allocation of $3 billion. The Senate stated that the borrowing would help address infrastructural deficits, enhance national connectivity, and stimulate economic activities in line with the government’s Renewed Hope Agenda.
Senate Justification
The Senate clarified that the borrowing falls within Nigeria’s legally permissible debt limits, in accordance with the Fiscal Responsibility Act 2007 and the Debt Management Office Act 2003. Lawmakers emphasized that the terms of the loans are favorable, with repayment periods spanning 20 to 35 years and structured largely on concessional terms.
Speaking during the debate, Deputy Senate President Barau Jibrin described the borrowing as “strategic and inclusive,” highlighting its nationwide coverage. Senator Solomon Adeola, Chairman of the Senate Committee on Appropriations, affirmed that the borrowing aligns with the budgetary provisions already approved for the 2025–2026 fiscal periods.
“This approval is necessary for full implementation of the national budget, as most of the projects require long-term financing to ensure their completion,” Adeola noted.
Concerns and Cautions
Despite the approval, some lawmakers expressed concerns about Nigeria’s growing debt profile and its implications for future administrations. They called for transparency and accountability in the disbursement and application of the funds to ensure the loans yield measurable benefits for Nigerians.
Senator Sani Musa emphasized that while borrowing is a common practice globally to stimulate growth, it must be managed prudently to avoid placing undue strain on the economy.
Economic Context
Nigeria’s debt stock has been a subject of debate, with analysts cautioning against excessive reliance on foreign loans given the country’s revenue-to-debt service ratio. Nonetheless, the federal government insists the new loans are essential to finance critical infrastructure and social projects necessary to drive economic recovery and growth.
President Tinubu’s administration maintains that the funds will bridge financing gaps and support development priorities as outlined in its medium- and long-term policy strategies.
Conclusion
The Senate’s approval signals a significant step in the federal government’s fiscal and development plans, with expectations that effective implementation of the projects will contribute to job creation, economic stability, and infrastructural advancement across the country.
However, the success of this borrowing plan will depend heavily on transparency, efficient management, and the government’s ability to deliver visible results that positively impact the lives of Nigerians.
