In a sweeping effort to address Nigeria’s mounting infrastructure challenges and pension liabilities, the Senate on Tuesday approved President Bola Tinubu’s borrowing plan for the 2025–2026 fiscal period.
The package includes external loans totaling $21.5 billion, €2.2 billion, and 15 billion Japanese Yen, along with a €65 million grant. The Senate also endorsed a ₦757.98 billion domestic bond issuance to settle longstanding arrears under the Contributory Pension Scheme (CPS), some of which date back to December 2023.
The approvals, according to lawmakers, are part of the 2025–2026 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), which outline the government’s fiscal trajectory for the coming years.
Chairman of the Senate Committee on Local and Foreign Debts, Senator Aliyu Wamakko, presented the report backing the measures. He noted that most of the proposed external loans are concessional—featuring low interest rates and extended repayment terms—aimed at strengthening key sectors without placing excessive strain on the nation’s finances.
In his correspondence to the National Assembly, President Tinubu emphasized the urgent need to close the country’s vast infrastructure gap, particularly in the wake of the fuel subsidy removal, which has impacted revenue and intensified economic hardship for Nigerians.
“Given the significant infrastructure deficit and limited financial resources amid declining domestic demand, it has become necessary to pursue prudent borrowing to finance national development,” Tinubu stated.
A major highlight of the Senate’s approval is the new $2 billion Foreign Currency Denominated Issuance Programme, enabled by Presidential Executive Order No. 16 of 2023. The initiative allows the federal government to raise foreign currency from within Nigeria’s economy—via local investors, diaspora remittances, and businesses operating domestically—rather than through international lenders.
According to the Senate, the programme aims to deepen Nigeria’s domestic capital market, reduce pressure on foreign reserves, and support strategic investments in energy, transportation, and digital infrastructure.
“The initiative offers a win-win by allowing investors to earn returns on their dollar holdings while contributing to national development,” the committee report stated.
The Senate also approved Tinubu’s request to issue bonds worth nearly ₦758 billion to offset pension arrears under the CPS, in line with the provisions of the Pension Reform Act (PRA) of 2014. The bond issuance, earlier approved by the Federal Executive Council (FEC) in February 2025, is intended to relieve thousands of retirees who have suffered due to delayed payments.
“The bond issuance will cushion the hardship of retirees, restore trust in the pension system, and stimulate liquidity in the domestic market,” the Senate noted.
President Tinubu stressed that the measure would significantly improve retirees’ welfare, enabling them to meet basic needs, access healthcare, and live with dignity.
While some concerns have been raised about Nigeria’s rising public debt, lawmakers argued that the long-term economic gains—such as enhanced infrastructure, job creation, food and water security, and improved healthcare and education—justify the borrowing.
The Senate described its endorsement of the borrowing and bond issuance as a strategic fiscal intervention aimed at stabilising the economy, accelerating development, and delivering long-overdue relief to pensioners across the country.
