President Bola Tinubu has asked the Senate to discontinue the processing of his earlier request for $20.52bn and €1.045bn in external loans, replacing it with a fresh $7.7bn borrowing proposal to partly finance the 2026 budget deficit.

The latest development was contained in a letter dated October 26, which was read by Senate President Godswill Akpabio during plenary on Wednesday.

Akpabio told lawmakers that the new request superseded the earlier proposal seeking approval for $20.52bn and €1.045bn in external borrowing.

The proposed $7.7bn loan forms part of the N29.2tn borrowing plan approved in the 2026 Appropriation Act to finance a budget deficit estimated at N31.4tn.

According to the President, the external component of the borrowing plan amounts to N10.79tn, while N18.4tn is expected to be sourced domestically.

Tinubu said the external funds would be raised through a combination of financing options, including Eurobond issuance, concessional and commercial facilities from multilateral and bilateral institutions, International Monetary Fund facilities and bridge financing arrangements.

He indicated that the Federal Government would place greater emphasis on Eurobond issuance because of the speed with which funds could be raised and the possibility of securing substantial financing at relatively lower costs.

The President said, “All the options will be pursued simultaneously, considering the costs and related benefits to the country and the time required to access the funds.

“In view of this, emphasis will be on the issuance of Eurobonds, which is typically faster to conclude. Additionally, a large amount can be raised through Eurobonds at a relatively lower cost.”

Tinubu explained that the final terms and conditions of the proposed borrowing would depend on prevailing market conditions at the time of pricing.

He assured the Senate that the Ministry of Finance and the Debt Management Office would work together to secure the most favourable borrowing terms for the country.

On the utilisation of the funds, the President said the proposed borrowing would support projects and programmes captured in the 2026 Appropriation Act, particularly in critical sectors of the economy.

He listed defence and security, transportation, agriculture, power, education and healthcare among the priority areas expected to benefit from the financing.

“The new external borrowings are required to implement the items, programmes and projects in the 2026 Appropriation Act, which are designed to consolidate and strengthen the macroeconomic reforms and gains recorded by this administration in the past few years,” he said.

The President added that the external borrowing would also contribute to strengthening Nigeria’s foreign reserves and supporting the stability of the naira.

He explained that the foreign currency proceeds would be received by the Central Bank of Nigeria on behalf of the Federal Government.

“It is also important to add that the process will increase the accretion to the external reserves, since the funds will be received by the Central Bank of Nigeria on behalf of the Federal Government, thereby supporting the naira exchange rate,” Tinubu stated.

The President based his request on Sections 21(1) and 27(1) of the Debt Management Office (Establishment, etc.) Act, 2003, which require legislative approval for external borrowing and empower the National Assembly to approve the terms and conditions of such facilities.

He also asked the Senate to authorise the Ministry of Finance, working with the Debt Management Office, to take the necessary steps to implement the proposed borrowing plan.