President Bola Tinubu on Tuesday transmitted three letters to the National Assembly requesting legislative approval for a new external borrowing plan amounting to over $21.5 billion, and a domestic bond issuance of ₦757.9 billion to settle outstanding national pension liabilities.
Tinubu made these requests in three separate letters transmitted to the National Assembly, which were read on the floor of the House of Representatives by the Speaker, Tajudeen Abbas.
In the first correspondence, President Tinubu sought the National Assembly’s approval for the establishment of a foreign currency-denominated issuance programme in the domestic debt market.
The proposed capital raise of up to $2bn would be implemented by the Debt Management Office in line with the Presidential Executive Order on Foreign Currency Denominated Financial Instruments, Local Issues Programme, 2023.
The president emphasised that the proceeds from the bond would be deployed into critical sectors of the economy capable of driving growth, enhancing infrastructure, creating employment, and boosting foreign exchange inflows.
He also noted that this initiative would offer dollar-denominated investment opportunities for local investors, deepen Nigeria’s financial market, and strengthen foreign reserves while promoting exchange rate stability.
According to Tinubu, the total facility sought under the external borrowing plan includes USD 21,543,647,912, EUR 2,193,856,324.54, and 15 billion Japanese Yen, in addition to a grant of 65 million EUR.
He noted that the proposed borrowing is crucial in light of the removal of fuel subsidy and its economic impact on the nation and its citizens.
“In light of the significant infrastructure deficit in the country and the paucity of financial resources needed to address this gap amid declining domestic demand, it has become essential to pursue prudent economic borrowing to close the financial shortfall,” the president said.
The President assured lawmakers that the proposed funds would be channelled into critical infrastructure projects, especially in the areas of railways, healthcare, and nationwide development programs across all 36 states and the Federal Capital Territory.
This initiative aims to generate employment, promote skill acquisition, foster entrepreneurship, reduce poverty, and enhance food security, as well as to improve the livelihoods of Nigerians,” he added.
However, Tinubu acknowledged that the programme would increase Nigeria’s public debt stock and servicing costs.
In a second letter, President Tinubu sought approval for the issuance of Federal Government of Nigeria bonds totalling N757.98bn to settle outstanding pension liabilities under the Contributory Pension Scheme as of December 2023.
Referencing the provisions of the Pension Reform Act (PRA) 2014, Tinubu noted that the government had struggled to meet its pension obligations over the years due to revenue challenges.