The request was detailed in an official letter from the President addressed to Senate President Godswill Akpabio. The letter was read aloud during the Senate's plenary session on Tuesday, November 5, 2025, highlighting the urgency of bridging the funding shortfall to enable the full execution of key government programmes and projects outlined in the upcoming fiscal year.
In the correspondence, President Tinubu emphasized that the proposed borrowing is essential for closing the budget deficit and ensuring uninterrupted implementation of priority initiatives. "This domestic loan will provide the necessary resources to fund critical infrastructure, social interventions, and economic recovery efforts as captured in the 2025 Appropriation Bill," the letter stated, underscoring the administration's commitment to fiscal prudence while addressing revenue shortfalls.
Following the reading of the letter, Senate President Akpabio promptly referred the matter to the Senate Committee on Local and Foreign Debt for expedited legislative scrutiny. He directed the committee, chaired by Senator Aliyu Wamakko, to conduct thorough deliberations and report back to the full Senate within one week. This timeline reflects the upper chamber's intent to fast-track the approval process ahead of the budget presentation and passage deadlines.
The ₦1.15 trillion loan request comes as part of broader efforts by the Tinubu administration to manage Nigeria's fiscal deficits, which have persisted due to fluctuating oil revenues, inflation pressures, and increased expenditure on security, infrastructure, and debt servicing. The 2025 budget, still in its preparatory stages, is anticipated to prioritize capital projects in sectors such as transportation, power, agriculture, and education, while also allocating funds for subsidy removals' palliatives and youth empowerment schemes.
This development is not isolated; it aligns with previous borrowing patterns under the current government. Since assuming office in May 2023, President Tinubu has overseen multiple loan approvals, including external borrowings from multilateral institutions like the World Bank and the African Development Bank. However, this particular request focuses exclusively on domestic sources, likely through instruments such as Federal Government Bonds, Treasury Bills, or Sukuk issuances managed by the Debt Management Office (DMO).
Domestic borrowing has become a preferred option for the government in recent years to minimize exposure to foreign exchange risks and currency depreciation. According to data from the DMO, Nigeria's domestic debt stock stood at approximately ₦59.12 trillion as of June 2025, representing a significant portion of the total public debt portfolio, which exceeds ₦120 trillion when including external obligations. The new loan, if approved, would push the domestic component higher, raising concerns among economists about sustainability and crowding out private sector credit.
Senate Majority Leader Opeyemi Bamidele, speaking briefly after the plenary, expressed support for the request, noting that it is "a strategic measure to fund the deficit without over-reliance on external lenders." He added that the Senate would ensure due diligence to safeguard national interests.
Opposition voices within the Senate, however, called for caution. Senator Ned Nwoko of the Peoples Democratic Party (PDP) urged the committee to scrutinize the loan's terms, interest rates, and repayment plans. "We cannot continue borrowing without corresponding revenue generation reforms," Nwoko stated during the session. "The government must demonstrate how this loan will translate into tangible economic growth and not just add to the debt burden on future generations."
The Senate Committee on Local and Foreign Debt is expected to engage with relevant stakeholders, including the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, and DMO officials, in its review process. Key areas of focus will include the loan's maturity profile, cost of funds, and alignment with the Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) for 2025-2027, which were approved by the Federal Executive Council earlier in the year.
This loan request coincides with ongoing debates over Nigeria's debt profile. The International Monetary Fund (IMF) in its latest Article IV consultation report projected Nigeria's public debt-to-GDP ratio at around 45% by the end of 2025, deeming it manageable but advising vigilance on domestic debt servicing costs, which consume a substantial chunk of federal revenues. In 2024, debt service obligations reportedly gulped over ₦10 trillion, prompting calls for expenditure rationalization.
President Tinubu's administration has defended its borrowing strategy as investment-driven, pointing to flagship projects like the Lagos-Calabar Coastal Highway, the Port Harcourt-Maiduguri Railway rehabilitation, and various agricultural initiatives under the Renewed Hope Agenda. Proponents argue that such borrowings are vital for stimulating economic recovery post the COVID-19 pandemic and amid global oil price volatility.
The 2025 budget deficit is estimated based on conservative oil price benchmarks of $75 per barrel, production targets of 1.8 million barrels per day, and exchange rate assumptions around ₦1,500 to the US dollar. Non-oil revenues, including tax reforms under the Nigeria Tax Reform Bills currently before the National Assembly, are expected to play a larger role in deficit financing, but shortfalls necessitate borrowing.
As the Senate committee deliberates, public discourse on social media and among civil society organizations has intensified. The Socio-Economic Rights and Accountability Project (SERAP) issued a statement on Tuesday urging transparency in the loan utilization. "Nigerians deserve to know exactly how every kobo borrowed will be spent," SERAP's deputy director, Kolawole Oluwadare, said.
Financial analysts predict that the domestic capital market can absorb the ₦1.15 trillion issuance without significant disruptions, given the liquidity in the banking sector and investor appetite for government securities. Yields on Nigerian bonds have stabilized around 18-20% for longer tenors, reflecting inflation expectations hovering at 25-30%.
The one-week reporting directive by Akpabio signals the Senate's alignment with the executive's timeline for budget finalization. President Tinubu is scheduled to present the 2025 Appropriation Bill to a joint session of the National Assembly later in November, with passage targeted before year-end to avoid another extended implementation of the previous budget.
In a related development, the House of Representatives is also gearing up to receive a similar request, as borrowing approvals require concurrence from both chambers under the Debt Management Office (Establishment) Act. House Speaker Tajudeen Abbas has indicated that the lower chamber's Committee on Aids, Loans, and Debt Management will synchronize its efforts with the Senate.
This ₦1.15 trillion domestic loan, if greenlit, will bolster the government's capacity to deliver on electoral promises, including the student loan scheme expansion, minimum wage adjustments, and security enhancements. However, it underscores the perennial challenge of revenue underperformance in Africa's largest economy.
As Nigeria navigates its post-subsidy reform era, with petrol prices stabilized through partial deregulation and forex unification yielding mixed results, the approval of this loan could set the tone for fiscal policy in 2025. Stakeholders across the political divide agree that while borrowing is inevitable, accountability and economic diversification remain key to long-term debt sustainability.
The Senate's decision, expected by mid-November, will be closely watched by investors, rating agencies like Moody's and Fitch, and international partners. For now, the wheels of legislative process are in motion, with the nation awaiting the outcome of this critical fiscal request.
