…The President has withdrawn a $20.5bn and €1.05bn request and asked for $7.7bn in Eurobonds, and economists want to know where the money will go
President Bola Ahmed Tinubu has withdrawn an earlier request to borrow about $20.5 billion and €1.05 billion from abroad, and has asked the Senate instead to approve a smaller $7.7bn loan, a facility of about $7.7 billion.
The new request is meant to be raised mainly through Eurobonds, which are international bonds priced in foreign currency. The change matters because the size of the borrowing, the currency it is priced in and the risks it carries all depend on what the Senate finally approves.
The new request is for $7,707,404,882.49, according to the letter that carries it. The letter is dated 26 October 2026. The Senate President, Godswill Akpabio, read the new request in plenary on a Wednesday and referred it to the Senate Committees on Local and Foreign Debts and on Appropriations.
Akpabio had earlier read the original request in the Senate on 27 October. Reports of the dates and the sequence differ slightly between outlets, as the reporting carried by allAfrica also shows, but the outline is consistent across them.
What was withdrawn
The original request was part of the 2026 to 2027 Supplementary External Borrowing Plan. It asked for approval to borrow $20,517,755,901 and €1,045,083,643. The new request replaces it. Because the new request is smaller and is framed around a single facility, its final cost will not be known until the Eurobonds are priced in the market. The reports reviewed for this article do not say whether the revised request keeps any euro-denominated portion.
Reports differ on the earlier total. One headline put the earlier request at $21.6 billion, but most sources gave $20.5 billion or $20.52 billion. The euro figure is reported as €1.04 billion in some places and €1.05 billion in others. This article uses the figures that most outlets report, namely $20.5 billion and €1.05 billion, and it notes where the numbers are contested.
How the new loan fits the budget
The approved borrowing plan for the year includes N18.4 trillion in domestic borrowing and N10.79 trillion in external borrowing. The $7.7 billion facility covers the external part of that plan, and it is meant to help finance the 2026 budget deficit. A deficit is the gap between what the government spends and what it collects in revenue, and it has to be funded by borrowing or other means. Nigeria has relied heavily on borrowing for years, which is why each new request draws close attention.
The government’s case is simple. It says the money is needed to close a gap in the budget and keep projects moving. The question critics ask is whether the terms, the cost and the spending plans are clear enough for lawmakers to judge. That is the main reason the request has been referred to committees rather than approved on the floor of the chamber. The government has defended its borrowing strategy before the Senate in the past, and the Gazette’s report on that defence shows how the same arguments have been made before.
What economists are asking
Economists have questioned the request. Their main demand is for detail on how the money will be spent, because a foreign loan is repaid in foreign currency, with interest, whatever project it finances. They also warn that borrowing in dollars and euros exposes the country to exchange-rate risk. If the naira weakens against those currencies, the naira cost of repaying the loan rises, even though the amount borrowed stays the same.
The concern is not theoretical. Nigeria’s public debt has grown in recent years. The Gazette reported in September that the total reached N159.35 trillion, and that a stronger naira hid part of the rise. A larger external loan adds to that stock. The cost of servicing it depends on the rates the market demands when the bonds are priced, and on how the naira performs over the life of the loan. The Gazette’s breakdown of the public debt figures sets out the numbers in more detail.
The wider debt picture
The request comes against a backdrop of scrutiny. A House panel has questioned ₦54.57 trillion in borrowing, a probe the Gazette covered in October, and asked how the money was used. Separately, international rating agencies upgraded Nigeria’s sovereign rating earlier this year. An upgrade can make borrowing cheaper, but it does not remove the obligation to repay, and the Gazette’s explainer on the ratings sets out what they do and do not mean for ordinary Nigerians.
For readers who want to understand how the government raises money in the market, the Gazette has explained how treasury bills and Eurobonds work, and how the domestic market differs from the external one. The distinction matters here. Domestic borrowing is paid in naira to local investors, while Eurobonds are sold to foreign investors and repaid in foreign currency. A Eurobond issue carries more exposure to the exchange rate, and to the mood of international markets, than a naira auction does.
What the Senate has to decide on the $7.7bn loan
The Senate now has to decide whether the request is approved, amended or rejected, and under what conditions. Lawmakers can ask for a breakdown of the projects the money will fund, a repayment schedule, and the total cost once the bonds are priced. Committees can also question officials about the earlier withdrawal, and whether it reflects a change in the government’s view of its own needs.
Those are reasonable questions to put to any government borrowing. The reports reviewed for this article do not say what conditions, if any, the Senate will attach. Until the committees report, the request should be treated as a proposal rather than an approved loan, and the figures in it should be read as the government’s estimate rather than a final amount.
What to watch on the $7.7bn loan
Three things will show how the request develops. The first is the committees’ findings, which will indicate whether the Senate is satisfied with the explanation of spending. The second is the final size and currency mix of the Eurobond issue. The third is the cost at which the bonds are priced, which will say more about the real burden on the public than the headline figure does.
Each of those points will be visible in public records, and each can be checked against the original letter and the committee reports. The Gazette will update this report when the committees report, or when the bonds are priced, so that readers can compare the proposal with what the market actually charged.
The bigger question is whether the borrowing plan, once approved, is matched by visible results in the projects it is meant to fund. Lawmakers, economists and voters will judge the request by that standard, and the government has the burden of showing that the money will be used well.
SOURCE: thegazette.ng