Senate Approves $21.5bn External Borrowing Plan, N757bn Pension Bond Arrears
The Nigerian Senate has approved President Bola Tinubu’s external borrowing plan totaling $21.5 billion for the 2025–2026 fiscal period, alongside a comprehensive financial package that includes a N757 billion bond issuance to clear outstanding pension arrears under the Contributory Pension Scheme (CPS).
The upper legislative chamber also granted approval for additional loans of 15 billion Japanese Yen and a €65 million grant, as well as the president’s request to raise up to $2 billion via a foreign-currency-denominated instrument in the domestic financial market.
The approvals followed the presentation of a report by the Senate Committee on Local and Foreign Debt, chaired by Senator Aliyu Wamakko (APC, Sokoto North), during Tuesday’s plenary session.
According to Wamakko, the loan requests are crucial for financing critical infrastructure and national development projects already outlined in the Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) for the 2025 budget cycle.
“These requests are in line with the already approved MTEF and FSP, which contain the borrowing components required to support the 2025 Appropriation Act,” Wamakko said. “After due consideration, the committee recommends that the Senate approve the president’s request.”
Chairman of the Senate Committee on Appropriations, Senator Solomon Adeola (APC, Ogun West), who seconded the motion, emphasized that the approval was largely procedural. He noted that the borrowing had already been factored into the 2025 budget passed by the National Assembly earlier in the year.
“The borrowing is embedded in the 2025 Appropriation Act. With this approval, all revenue sources including loans are now secured to fully fund the national budget,” Adeola said.
In a similar vein, Chairman of the Senate Committee on Finance, Senator Sani Musa (APC, Niger East), clarified that the borrowing plan spans a six-year disbursement period rather than being confined to the 2025 fiscal year. He assured Nigerians that the country has maintained its integrity in global finance by consistently meeting its debt obligations.
“Nigeria has not defaulted on any of its existing loan repayments,” Musa stated. “This plan is part of a long-term development financing strategy.”
A significant portion of the approved package is the issuance of a Federal Government Bond worth N757 billion for the settlement of accrued pension rights under the CPS as of December 2023 a move aimed at addressing longstanding grievances among retired public sector workers.
President Tinubu had earlier explained that the borrowing plan was structured to stimulate economic growth through strategic investments in power, transportation, education, and health, among other sectors. With Senate approval now secured, implementation of the funding framework is expected to begin in the coming months.
Despite concerns from some economic analysts about the country’s growing debt profile, the federal government maintains that the borrowings are necessary and sustainable, given Nigeria’s infrastructure deficit and development needs.
The Senate’s decision marks a significant step forward in executing the federal government’s economic agenda for 2025 and beyond.
