Nigerian President Bola Tinubu on Wednesday asked parliament to approve $347 million in foreign loans for its 2025-26 borrowing plan to plug financial shortfalls and boost growth.
Tinubu in a letter to the National Assembly which was read by Tajudeen Abbas, speaker of the house of representatives, during the plenary said the loan is necessary due to a rise in the funding needs for the Lagos-Calabar super highway.
The coastal road whose cost was initially estimated at $700 million, has increased by $47 million to $747 million.
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The president said when the borrowing plan was transmitted to the national assembly, the lead arranger for financing only had financing commitments of up to $700 million from lenders.
He said the shortfall in the financing was covered by export credit agencies, adding that it is imperative to increase the project’s financing by $47 million to match the loan size specified in the financing documents.
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Tinubu also said $300 million is required for the Nigerian universal communications access project, which aims to bridge the digital divide through the deployment of 7,000 telecommunications towers across underserved and unserved communities.
The Nigerian president said the project was inadvertently omitted in the computation of the borrowing plan.
BusinessDay had earlier reported that Tinubu sought the approval of the parliament for a foreign loan of more than $21.5 billion to meets its infrastructural obligations. The Senate approved the loan on Tuesday.
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The total borrowing plans now amount to $21.847 billion, raising concerns about the country’s debt sustainability.
But the House said despite the additional borrowings, the federal government’s debt portfolio “remains sustainable”.
“At over N145 trillion, debt to GDP ratio of about 50% is within the international threshold (56%),” the parliament said.
According to the lawmakers, Tinubu’s administration has succeeded in reducing the high debt service to revenue ratio from over 90 percent to less than 70 percent.
The parliament stressed that the anticipated revenue gains from the Nigerian Tax Act 2025, projected to grow by over 18 percent year-on-year starting from 2026 reduces the risk of future debt distress and provides a buffer for debt servicing.
