Tinubu Seeks Legislative Nod for Multi-Billion Dollar Borrowing Plan to Fund Infrastructure, Stabilize Economy, and Settle Pension Arrears
President Bola Ahmed Tinubu has formally approached the House of Representatives, seeking legislative approval for a series of sweeping financial proposals aimed at bolstering Nigeria’s economic stability, accelerating development projects, and fulfilling outstanding obligations under the nation’s pension scheme.
The President’s requests, read during plenary on Tuesday by Speaker Tajudeen Abbas, comprise three key components: the federal government’s external borrowing rolling plan for 2025–2026, the issuance of a $2 billion foreign currency bond in the domestic market, and the release of N757.98 billion through Federal Government bonds to clear accumulated pension liabilities under the Contributory Pension Scheme (CPS).
According to the President, the financial instruments are anchored on the Presidential Executive Order signed in October 2023, as well as relevant statutory provisions including Section 44 (1) and (2) of the Fiscal Responsibility Act 2007 and Section 1(7) of the Executive Order. These provisions require National Assembly approval for any new public borrowing and the allocation of such proceeds.
In one of the letters addressed to the House, President Tinubu presented a comprehensive external borrowing plan, covering the years 2025 and 2026. The proposal seeks approval for: $21.5 billion (USD); €2.2 billion (EUR); 15 billion Japanese yen; €65 million in grant aid.
The loans and grants, the President said, are designed to fund critical, high-impact projects in sectors such as transportation (roads and rail), power, agriculture, healthcare, education, water resources, security, and job creation.
“These projects were selected based on rigorous technical and economic evaluations. They are aimed at addressing Nigeria’s pressing infrastructure deficit, reducing poverty, boosting food security, and creating sustainable employment,” Tinubu explained.
He noted that implementation would span all 36 states and the Federal Capital Territory (FCT), reflecting a commitment to equitable development and nationwide economic stimulation.
Citing the aftermath of fuel subsidy removal and declining domestic revenue, Tinubu emphasized that borrowing had become imperative to bridge fiscal gaps, revitalize essential services, and meet development targets.
In a related move, the President sought legislative endorsement to issue a $2 billion foreign currency bond within Nigeria’s domestic capital market. The initiative, he noted, is part of a broader strategy to diversify funding sources, attract investment, stabilize the naira, and deepen the domestic financial system.
“The proceeds will be directed at sectors capable of generating returns in economic growth, infrastructure, employment, and increased foreign exchange earnings,” Tinubu wrote, underscoring the strategic focus of the bond issuance.
He added that by issuing this bond domestically, the government also aims to boost investor confidence and strengthen the local bond market while tapping into foreign exchange reserves held by institutional investors within the country.
In a third request, the President called on the National Assembly to approve the issuance of N757.98 billion in bonds to settle longstanding arrears owed to retirees under the Contributory Pension Scheme as of December 31, 2023.
Tinubu acknowledged that due to persistent revenue shortfalls, the federal government had failed to meet its statutory obligations under the Pension Reform Act of 2014, resulting in a backlog of unpaid entitlements.
“This bond issuance will enable the federal government to meet its obligations to retirees, restore confidence in the pension system, and improve the welfare of public sector retirees,” he noted.
The President further emphasized that clearing the backlog would stimulate liquidity in the economy, raise morale within the civil service, and reinforce public trust in the federal pension administration. He also revealed that this measure had received the approval of the Federal Executive Council (FEC) in February 2025.
All three requests were submitted in compliance with Nigeria’s legal and fiscal frameworks, including the Fiscal Responsibility Act, Presidential Executive Order, and Pension Reform Act, which collectively stipulate that borrowing must be transparent, strategic, and subject to legislative oversight.
The proposals have since been referred to the House Committee on Finance for detailed scrutiny and are expected to form the basis for major deliberations in the coming weeks.
While the President acknowledged that the new borrowings would increase Nigeria’s total public debt and debt servicing costs, he maintained that they are necessary investments in the country’s long-term prosperity.
Economic analysts have noted that although the borrowing plans are ambitious, they could potentially accelerate economic growth if the funds are judiciously managed and channeled into productive sectors.
The outcome of the legislative process will determine how soon the Tinubu administration can proceed with the proposed borrowings and begin implementation of the associated development programs.