The Senate has approved President Bola Tinubu’s request for external loans totalling up to $6 billion, including a $5 billion financing arrangement with First Abu Dhabi Bank and a separate $1 billion facility backed by UK Export Finance to rehabilitate Nigeria’s major seaports.
The requests, conveyed in letters read on the Senate floor on Tuesday by Senate President Godswill Akpabio, form part of the administration’s broader strategy to shore up fiscal liquidity, fund infrastructure, and restructure existing debt obligations.
In the first correspondence dated March 5, 2026, President Tinubu sought legislative approval to establish “a structured total return swap external financing programme of up to USD 5 billion with First Abu Dhabi Bank”.
“The purpose of this letter is to request for the approval and resolution of the National Assembly… to establish a structured total return swap (TRS) derivative external financing programme… of up to USD 5 billion, which should be made available to the Federal Government of Nigeria in tranches,” the President wrote.
He explained that proceeds from the facility would be deployed towards “budget implementation, development of key infrastructure projects… and repayment of relatively more expensive domestic and external debts” within the federal government’s portfolio.
The President added that the programme would also “enable the Federal Government of Nigeria to meet other urgent financial needs that may be approved from time to time”.
On the implications for Nigeria’s debt profile, Tinubu acknowledged that the proposed borrowing would raise the country’s public debt stock, currently put at $110.3 billion as of December 31, 2025.
“The Senate is invited to note that the proposed loan… will increase the total public debt stock… Accordingly… the loan amount will be drawn down in tranches to spread the impact on debt stock and debt service in a sustainable manner,” he stated.
He further sought approval for specific terms, including the issuance of naira-denominated federal government securities as collateral and the payment of margining in U.S. dollars “as and when demand is met”.
While referring the request to the Senate Committee on Local and Foreign Debts, Akpabio urged expedited consideration, noting that the correspondence had arrived during the legislative recess.
“I will refer this to you and hope that you have taken time to go through all the documents… we will be happy to receive your report today,” he said, citing the need to conclude work ahead of the Easter break and other political engagements.
In a second request, the President sought approval for a $1 billion loan facility arranged by Citibank and backed by UK Export Finance for the rehabilitation of the Lagos Port Complex and Tin Can Island Port.
According to the letter, the project is a “strategic modernisation initiative” aimed at restoring two of Nigeria’s most critical maritime gateways, which have “reached critical engineering failure stages after approximately 50 to 100 years’ life cycles”.
“The specific objectives of the project are to address critical infrastructure deficiencies accumulated over decades of operations, improve port functionality and operational efficiency… enhance safety standards and align port facilities with global best practices,” Tinubu stated.
He emphasised the importance of the ports to Nigeria’s economy, noting that they “collectively handle the majority of Nigeria’s seaborne trade and serve as principal entry and exit points for goods”.
The financing structure, he explained, would be implemented under an Engineering, Procurement, Construction plus Finance (EPC+F) model by the Nigerian Ports Authority, with a tenure of up to 14 years, including a 48-month availability period.
Akpabio, in his remarks, underscored the urgency of rehabilitating the ports, recalling longstanding structural issues that have undermined Nigeria’s competitiveness.
“The implication is that the current is too swift and a lot of ships, because of the lead time, prefer to go to Cotonou, so Nigeria became a very unattractive destination for shippers,” he said.
He added that the agreement reflected the benefits of the President’s recent international engagements.
“I was there when this agreement was signed and I must commend the President for his international foray that is bringing dividends to Nigeria. Results are beginning to show,” Akpabio noted.
The Senate President subsequently directed the Committee on Local and Foreign Debts to treat both requests with urgency and report back before the close of legislative business.
The loan requests come amid broader fiscal adjustments proposed by the Tinubu administration, including a restructuring of the 2026 budget to accommodate legacy debts and new priority expenditures, as the government seeks to stabilise public finances while sustaining infrastructure development.
Credit: The Sun