Reps approve Tinubu’s request to borrow $6bn external loan

..debt stock rises to $116.9bn

The House of Representatives has approved President Bola Tinubu’s request to borrow $6bn from lenders in the United Arab Emirates and the United Kingdom, pushing the federal government’s total public debt stock to approximately $116.9bn.

The approval followed the consideration and adoption of reports by the House Committee on Aids, Loans and Debt Management, presented during session by Tajudeen Abbas, Speaker of the House on Tuesday.

The borrowing package comprises a $5bn structured total return swap financing arrangement with First Abu Dhabi Bank and a separate $1bn facility backed by UK Export Finance (UKEF), arranged by Citibank, for the rehabilitation of Nigeria’s key port infrastructure.

In separate letters read on the floor of the House, Tinubu said the $5bn facility would be deployed to support budget implementation, finance priority infrastructure projects, and refinance more expensive domestic and external debt obligations within the federal government’s portfolio.

He added that the loan would also provide fiscal liquidity and enable the government to meet urgent financing needs as they arise.

The president also informed that the new borrowings will increase Nigeria’s total public debt stock stood at $110.93bn, equivalent to about N159.21tn, as of December 31, 2025. With the newly approved borrowing, the figure is expected to rise to approximately $116.93bn.

The president also put projected debt service for 2026 at about $20.48 billion.

The President noted that the facility would be drawn in tranches to moderate the impact on debt sustainability and servicing costs.

Details of the $5bn arrangement indicate it will be executed as a total return swap transaction between the federal government and First Abu Dhabi Bank, backed by naira-denominated federal government securities issued as collateral, with a coverage ratio of up to 133.3 percent of the amount drawn.

The second component of the borrowing, valued at $1.0009bn, is a UKEF-backed facility to be used for the rehabilitation and reconstruction of the Lagos Port Complex and Tin Can Island Port Complex, two of Nigeria’s busiest maritime gateways.
Lawmakers said the port upgrade is expected to improve trade efficiency and support economic growth by easing longstanding congestion and infrastructure bottlenecks.

The structure also requires the government to make margin payments in US dollars if fluctuations in market prices or exchange rates reduce the value of the pledged securities below agreed thresholds.

The House Committee, chaired by Abubakar Nalaraba, recommended approval of both facilities, arguing that the financing aligns with the government’s fiscal strategy of combining external borrowing with debt refinancing to manage costs.