Tinubu seeks another $21.5 billion foreign loans & ₦757.9 billion for outstanding Pension liabilities clearance
In a significant move to address Nigeria’s infrastructure challenges and pension shortfalls, President Bola Tinubu has requested legislative approval for a new external borrowing plan worth over $21.5 billion, alongside a ₦757.9 billion bond issuance to clear outstanding pension liabilities.
The President transmitted three letters to the National Assembly on Tuesday, outlining his administration’s intentions to pursue targeted economic borrowing and domestic financing as part of a broader recovery strategy.
Foreign Currency Bond Programme to Raise $2 Billion
In the first letter, Tinubu sought approval for the establishment of a foreign currency-denominated bond programme in the domestic debt market. The plan would allow the government to raise up to $2 billion, with implementation led by the Debt Management Office.
According to the President, proceeds from this bond would be invested in critical sectors of the economy, including infrastructure, job creation, and foreign exchange generation. The initiative also aims to:
Offer dollar-denominated investment opportunities for local investors
Deepen Nigeria’s financial markets
Strengthen foreign reserves
Enhance exchange rate stability
The programme, he noted, aligns with the Presidential Executive Order on Foreign Currency Denominated Financial Instruments (Local Issues Programme), 2023.
Breakdown of the External Borrowing Plan
The total foreign borrowing request includes:
$21.54 billion USD
€2.19 billion EUR
15 billion Japanese Yen
An additional €65 million EUR in grants
Tinubu stressed that the loans are vital in the wake of fuel subsidy removal and the economic ripple effects that have followed. “It has become essential to pursue prudent economic borrowing to close the financial shortfall,” he wrote.
These funds would be channeled into railway development, healthcare infrastructure, and nationwide development initiatives across Nigeria’s 36 states and the Federal Capital Territory.
Domestic Bond to Clear Pension Liabilities
In a separate letter, President Tinubu requested the National Assembly’s approval to issue ₦757.98 billion in government bonds to settle pension arrears under the Contributory Pension Scheme, dating back to December 2023.
Referencing the Pension Reform Act of 2014, Tinubu acknowledged that persistent revenue shortfalls had made it difficult for the government to fulfill its pension obligations.
Clearing these liabilities, he argued, would:
Ease hardship for retirees
Restore public trust in the pension system
Improve morale among civil servants
Boost liquidity and stimulate economic growth
The bond proposal was approved by the Federal Executive Council on February 4, 2025.
Economic Growth vs. Rising Debt
President Tinubu was candid about the cost implications of the borrowing plan. He acknowledged that both the foreign loans and domestic bonds would increase Nigeria’s debt stock and servicing costs. However, he emphasized the strategic necessity of these measures to drive long-term development.
“This initiative aims to generate employment, promote skill acquisition, foster entrepreneurship, reduce poverty, and enhance food security,” he said.
What Happens Next?
The requests have been referred to the appropriate committees in the House of Representatives, including the Committee on National Planning and Economic Development and the Committee on Pensions, for further legislative review and action.
Tinubu closed his letter with an appeal for timely approval and a pledge of transparency and accountability throughout the process.
