The Senate has yesterday approved President Bola Tinubu’s external borrowing plan of over $21bn for the 2025–2026 fiscal cycle, which is believed to allow for the full implementation of the 2025 Appropriation Act. The detailed borrowing package includes $21.19bn in direct foreign loans, €4bn, ¥15bn, a $65m grant and domestic borrowing through government bonds summing upto approximately N757bn.
In a similar manner, a provision to raise up to $2bn through a foreign-currency-denominated instrument in the domestic market is also part of the borrowing plan.
The approval is coming after a presentation of a report by Senator Aliyu Wamakko, Chairman of the Senate Committee on Local and Foreign Debt, who disclosed that the plan was first sent to the National Assembly on May 27, but was delayed due to legislative recess and documentation issues from the Debt Management Office.
According to the Chairman of the Senate Committee on Appropriations, Senator Olamilekan Adeola, most of the loan requests had already been captured into the Medium-Term Expenditure Framework and the 2025 budget.
Adeola 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”.
There were mixed reaction concerning the continued borrowing by the president which has continued despite the removal of the fuel subsidy that should have freed up resources for the government.
According to Senator Sani Musa who clarifies that the loan disbursement would span six years, not just 2025.
He defended the borrowing, saying it aligned with global economic practices.
“There’s no economy that grows without borrowing. What we are doing is in line with global best practices,” he said.
Meanwhile, Senator Adetokunbo Abiru, Committee on Banking, Insurance and Other Financial Institutions, assured the chamber that the loans are concessional and adhere to the Fiscal Responsibility Act and Debt Management Act.
He explained, “These loans are long-term, some with tenors ranging from 20 to 35 years, and they are strictly tied to capital and human development projects”.
However, Senator Abdul Ningi (Bauchi Central) has raised concerns over its transparency and equitable distribution across the country, warning that Nigerians deserved to know the specifics of the loans and their intended impact on the country economics.
“We need to tell our constituents exactly how much is being borrowed in their name, and for what purpose,” he said.
The presidency revealed that the government plan to spend the loan on infrastructure, agriculture, security, power, housing, and digital connectivity.
A major highlight is the allocation of $3bn for the revitalisation of the Eastern Rail Corridor, stretching from Port Harcourt to Maiduguri.
Senator Victor Umeh (Anambra Central) hailed the rail project as a milestone, saying, “This is the first time I have seen $3bn allocated to rebuild the eastern rail line. That alone justifies my full support.”
Deputy Senate President Jibrin Barau, commended the committee’s efforts and stressed that the borrowing plan reflected national inclusiveness.
“This shows that the Renewed Hope Agenda is working. No region is left out,” he said.
Meanwhile, the lawmakers insisted that all funds must be deployed strictly for capital and development projects, in line with public finance regulations.