President Bola Tinubu has approached the Senate for approval to secure a fresh $516.3 million loan from Deutsche Bank to finance the proposed Sokoto–Badagry Super Highway, in a move that underscores the Federal Government’s continued reliance on both external and domestic borrowing to fund critical infrastructure and fiscal obligations.
The request, conveyed in a letter addressed to Senate President Godswill Akpabio and read during Thursday’s plenary, seeks expedited legislative consideration. Akpabio subsequently referred the proposal to the Senate Committee on Local and Foreign Debts, directing it to report back within one week.
The planned borrowing comes on the heels of a broader external financing push by the administration. Only weeks earlier, Tinubu had asked the National Assembly to approve a $6 billion borrowing plan aimed at bridging Nigeria’s fiscal gap. The package includes a proposed $5 billion facility from Abu Dhabi Bank to support budgetary needs and debt obligations, alongside a $1 billion loan from London-based Citibank earmarked for the rehabilitation of key port infrastructure, including the Lagos Port Complex and Tin Can Island Port.
While the external borrowing drive gathers pace, the Federal Government is simultaneously intensifying its domestic debt issuance programme. The Debt Management Office (DMO) has disclosed plans to raise N700 billion from the local bond market in April 2026, continuing a gradual reduction in monthly borrowing targets.
According to the DMO’s bond offer circular, the auction, scheduled for April 27 with settlement on April 29, will be executed through the re-opening of three existing instruments: N300 billion of the 17.945 per cent FGN August 2030 bond, N100 billion of the 17.95 per cent FGN June 2032 bond, and N300 billion of the 22.60 per cent FGN January 2035 bond.
The strategy of re-opening existing bonds is designed to deepen liquidity in benchmark securities while appealing to institutional investors such as pension funds, banks, and asset managers. The bonds, issued in units of N1,000 with a minimum subscription of N50.001 million, also benefit from tax exemptions and qualify as liquid assets for banks; factors that continue to bolster demand despite prevailing macroeconomic challenges.
Notably, the April issuance marks the fourth consecutive monthly decline in the government’s domestic borrowing target, dropping from N900 billion in January to N800 billion in February, N750 billion in March, and now N700 billion. Analysts attribute the downward adjustment partly to efforts to manage borrowing costs and rebalance the debt portfolio.
However, the cost of borrowing remains elevated. Nigeria’s tight monetary environment, driven by the Central Bank’s sustained efforts to tame inflation, has pushed yields upward. While the five-year and seven-year instruments carry interest rates of about 17.945 per cent and 17.95 per cent respectively, the 10-year bond offers a significantly higher yield of 22.60 per cent, reflecting heightened risk perceptions linked to inflationary pressures, exchange rate volatility, and global economic uncertainty.
Final yields will be determined at auction, with successful bidders paying based on their yield-to-maturity bids plus accrued interest.
The broader fiscal picture highlights growing strain. Nigeria’s total debt servicing bill rose sharply to about N16 trillion in 2025, representing a 22.9 per cent increase from the N13.02 trillion recorded in 2024. The surge underscores the increasing share of government revenue being absorbed by debt obligations, raising concerns about fiscal sustainability.