President Bola Tinubu has withdrawn his earlier request for $20.52 billion and €1.045 billion in external borrowing and replaced it with a fresh request for $7.707 billion (N10.79 trillion) to part-finance the 2026 budget deficit.
In a letter dated October 26, 2026, read by Senate President Godswill Akpabio during plenary on Wednesday, Tinubu said the proposed borrowing is the external component of the N29.2 trillion new borrowing already approved in the 2026 Appropriation Act to finance a deficit of N31.4 trillion.
Of that N29.2 trillion, N18.4 trillion is to be raised from domestic sources, while N10.79 trillion will come from external sources. The President sought authorisation for the Minister of Finance and the Debt Management Office (DMO) to execute the borrowing, anchored on Sections 21(1) and 27(1) of the DMO Act, 2003.
Tinubu said the $7.7bn will be raised through a combination of Eurobond issuance — which he described as faster to conclude and able to raise larger amounts at relatively lower cost — concessional and commercial facilities from multilateral and bilateral institutions, IMF facilities, bridge financing, and direct borrowing from international financial institutions. Final terms, interest rates and repayment periods, he said, will be determined at the time of pricing.
The funds are earmarked for projects in defence and security, transportation, agriculture, power, education and healthcare.
Akpabio said the new letter effectively supersedes the earlier request, describing it as “more explicit” on financing arrangements. The request has been referred to the Senate Committee on Local and Foreign Debts for consideration.
The request comes as Nigeria’s total public debt stood at N166.79 trillion ($120.93bn) as at June 30, 2026, according to the Debt Management Office — comprising N91.59 trillion domestic and N75.20 trillion external.
If fully drawn, the $7.7bn would push external debt from $54.52bn to about $62.2bn and total debt to about N177.6 trillion, before the N18.4 trillion domestic borrowing is counted.
However, debt service remains the heaviest burden. The 2026 budget allocates N15.8 trillion to debt service, about 45% of projected revenue, while the Federal Government spent N5.28 trillion servicing domestic debt in the first half of 2026 alone.
The Presidency argues the loan will support the naira, fund infrastructure and is cheaper than domestic borrowing at the 23% Monetary Policy Rate, but critics, including opposition figures, have demanded a project-by-project breakdown and warned against expensive Eurobond borrowing less than three months to the 2027 election.
Concerns By Nigerians
The government argues the loan is investment, not consumption. Finance Minister Taiwo Oyedele says the proceeds, to be received by the Central Bank, will support the naira and fund infrastructure like the Lagos-Calabar Coastal Highway to build a $1 trillion economy by 2030.
External borrowing, even at 9-11% for Eurobonds, is cheaper than domestic borrowing at a 23% Monetary Policy Rate, and does not crowd out businesses.
Critics are not convinced. Former Vice President Atiku Abubakar and opposition figures, who forced the withdrawal of the earlier $20.5bn request, demanded a project-by-project breakdown. The new letter still lists sectors, not specific project costs or timelines.
The timing also raises questions. The request comes less than three months to the 2027 general election, in which Tinubu is seeking re-election. Critics fear borrowing now to fund pre-election spending, leaving repayment to the next administration.
There is also the Eurobond trap. Tinubu’s emphasis on Eurobonds because they are “faster to conclude” suggests urgency over cost discipline. Nigeria already has $18.55bn in Eurobonds outstanding. Concessional World Bank loans at 1-2% take longer but are five times cheaper.
The Senate has referred the request to its Committee on Local and Foreign Debts. The key questions it must ask are: What percentage will be Eurobond versus concessional? What is the interest rate at pricing? And where is the project list?
Will Slightly Make Things Expensive
The analysts argue that the government already spends 45 kobo out of every N1 it earns, to pay interest on old loans. The new loan adds more interest, and that would mean less money for schools, hospitals, roads, unless the loan builds things that make money.
Eurobond Angle
The analysts say although Eurobond is like borrowing from foreign investors in dollars, which is fast, it is however expensive, with about 9% to 11% interest in dollars. World Bank loan is slow but cheap, 1% to 2%. But president Tinubu wants Eurobond first because it is fast.
If the $7.7bn builds power plants, roads and farms that generate revenue, it is sustainable. If it is spent on recurrent costs and pre-election projects with no returns, it pushes Nigeria closer to the point where debt service eats the budget meant for schools, hospitals and health.
According to the analysts the loan itself is not the problem. What it is spent on, at what rate, and whether Nigerians can see the projects — that is the problem.
How Much Nigeria, Nigerians Owe Now?
As of June 2026: N166.79 trillion. If you share it among all Nigerians, each person owes *N702,185*. With this new loan + domestic borrowing, it will go to about N825,000 per person.
Any Cause For worry?
The absence of project list, high interest, money spent before election with no result, are some of the grey areas identified by the analysts.
This is because, they further argue that money builds power, roads, farms, and therefore the Senate should request government to publish projects and interest rate.
However, the promise by government that the proceeds will be paid into CBN, could assist the naira as the $7.7bn coming into CBN reserves will support Naira for a while. But if Naira falls from N1,400 to N1,600, we will need N1.54 trillion extra just to repay the same $7.7bn
Consequently, they were unanimous in their submissions that the country is borrowing to cover a budget already approved. The danger is not borrowing, but borrowing expensive dollars to spend on things that don’t make money.
