Abuja, Nigeria—The Nigerian Senate has approved the request by President Bola Ahmed Tinubu to secure a ₦1.15 trillion domestic loan to partially finance the deficit in the 2025 Federal Budget.¹

 which comes after a thorough review by the Senate Committees on Finance and Appropriation, allows the Federal Government to immediately proceed with borrowing the funds from the domestic market to fund various capital projects and stabilize the economy.

Bridging the Budgetary Gap

The loan is a crucial component of the government's strategy to address the funding gap within the current fiscal year's budget. The President, in his letter to the National Assembly, stressed that the loan was necessary to ensure the continuous funding of critical infrastructure and social programmes outlined in the Renewed Hope Agenda.

Details provided by the Senate committee indicate that the loan will be primarily sourced through Domestic Debt Issuances, such as the Nigerian Treasury Bills (NTB) and Federal Government Bonds (FGN Bonds), which are designed to mobilize local capital for development.

Focus on Economic Stability and Infrastructure

While the full breakdown of how the funds will be allocated is yet to be made public, the administration emphasized that the borrowing is targeted at priority sectors:

• Infrastructure: Financing key road, rail, and power projects across the six geopolitical zones.

• Economic Stabilization: Providing liquidity to support various economic initiatives designed to mitigate the effects of current economic reforms.

• Social Programmes: Ensuring the continued funding of poverty alleviation and social investment programmes.

The Senate, in its resolution, mandated the Minister of Finance and Coordinating Minister of the Economy to provide quarterly reports on the utilization of the borrowed funds to ensure transparency and accountability.

Concerns Over Rising Debt

The approval, however, was not without debate. Some senators voiced concerns over the nation’s rapidly increasing debt profile, urging the executive to intensify efforts to boost non-oil revenue generation and diversify the country's economic base to reduce reliance on borrowing.

Despite these reservations, the motion for approval was eventually passed, underscoring the urgency of funding the 2025 budget to prevent delays in government operations and capital projects.

The next step is for the House of Representatives, which received a similar request, to approve the loan before the funds can be fully accessed by the executive.