Tinubu seeks Senate approval for N1.15 trillion domestic loan to fund 2025 budget deficit
President requests new borrowing to support government programs
President Bola Ahmed Tinubu has formally requested the approval of the National Assembly to secure a fresh ₦1.15 trillion loan from the domestic debt market. The borrowing, according to the president, is intended to help finance the deficit in the 2025 national budget and ensure the smooth implementation of government programs and capital projects.
The president’s request was contained in an official letter read during Tuesday’s plenary session of the Senate, presided over by Senate President Godswill Akpabio. The letter outlined the rationale behind the borrowing proposal and stressed the importance of closing the fiscal gap to maintain the stability of government operations.
Senate receives presidential communication
In his communication to lawmakers, President Tinubu explained that the new borrowing forms part of the government’s broader fiscal strategy to stimulate economic growth, fund critical infrastructure, and sustain ongoing social investment programs.
“The proposed borrowing is intended to bridge the funding gap and ensure full implementation of government programs and projects under the 2025 fiscal plan,” the letter stated.
The Senate President, after reading the letter, referred the request to the Senate Committee on Local and Foreign Debt, directing it to examine the proposal and submit its report within one week for further legislative action.
Legislative process and next steps
The committee is expected to scrutinize the details of the proposed loan, including its terms, sources, and potential impact on Nigeria’s debt sustainability profile. The report from the committee will then be presented to the full Senate for debate and possible approval.
The legislative review process is an essential step in ensuring that all government borrowing aligns with the provisions of the Fiscal Responsibility Act, which mandates transparency and accountability in public finance management.
If approved, the ₦1.15 trillion borrowing will add to Nigeria’s growing domestic debt portfolio, which has expanded significantly in recent years as the government seeks alternative ways to fund budget deficits and major development projects.
Economic implications of the proposed borrowing
Economists note that while domestic borrowing helps the government raise funds without relying heavily on foreign lenders, it also comes with challenges. Increased domestic debt often leads to higher interest obligations and can crowd out private sector borrowing, affecting business growth and investment.
However, supporters of the policy argue that targeted domestic borrowing remains one of the safest and most sustainable options for the government, particularly when funds are directed toward productive sectors such as infrastructure, agriculture, and energy.
The Tinubu administration has consistently emphasized its commitment to balancing fiscal responsibility with economic growth. Officials within the Ministry of Finance and the Budget Office have stated that new borrowings will be used strategically to fund capital projects capable of driving job creation and expanding revenue generation.
Budget deficit and government’s fiscal strategy
Nigeria’s 2025 budget, which is still being deliberated by lawmakers, contains a projected deficit arising from lower-than-expected revenue collection, global oil price fluctuations, and rising public expenditure. The federal government plans to close part of this gap through domestic borrowing, while also seeking improved tax compliance and increased non-oil revenue.
Fiscal analysts have urged the government to accompany any new borrowing with clear accountability mechanisms and a focus on value-for-money spending. They emphasize that effective utilization of borrowed funds is critical to avoid increasing Nigeria’s debt burden without tangible economic returns.
Balancing debt and development priorities
As of mid-2025, Nigeria’s total public debt stands at several trillions of naira, with domestic obligations accounting for a significant share. The government has defended its borrowing policy, stating that debt remains within manageable limits relative to the country’s Gross Domestic Product (GDP).
Experts have also pointed out that sustained borrowing can be justified if it leads to long-term productivity gains, especially through investments in transport infrastructure, power supply, and digital economy projects that improve competitiveness and attract private capital.
Conclusion
The Senate Committee on Local and Foreign Debt is expected to submit its findings on the president’s ₦1.15 trillion loan request within a week. The outcome will determine whether the borrowing receives swift approval or requires further adjustments.
As the federal government pushes to implement the 2025 fiscal plan, the debate over debt sustainability and fiscal discipline remains a central topic in Nigeria’s economic discourse. The coming weeks will reveal how lawmakers balance the need for development financing with the imperative to maintain a stable and sustainable debt profile.
