The Nigerian Senate has approved President Bola Ahmed Tinubu’s request to obtain a new ₦1.15 trillion domestic loan to help fund part of the deficit in the 2025 national budget.
The approval was granted on Wednesday after the Senate adopted the report of its Committee on Local and Foreign Debt, which examined and endorsed the president’s borrowing proposal.
The lawmakers said the fresh loan was necessary to balance the country’s rising fiscal deficit following adjustments made to the 2025 Appropriation Act.
According to the Senate report, Nigeria’s total government spending for 2025 now stands at ₦59.99 trillion, which is an increase of ₦5.25 trillion from the ₦54.74 trillion initially proposed by the Executive arm of government. The extra spending, lawmakers said, resulted in an expansion of the budget deficit to ₦14.10 trillion.
Of that total deficit, ₦12.95 trillion had already been approved for borrowing under previous authorisations. The new ₦1.15 trillion loan—officially listed as ₦1,147,462,863,321—will cover the remaining shortfall and enable the Federal Government to fully implement its 2025 spending plan.
Presenting the report before the Senate, the Chairman of the Committee on Local and Foreign Debt, Senator Haruna Manu (Taraba Central), explained that the borrowing plan was part of the government’s strategy to meet financial obligations while maintaining fiscal balance.
He said the committee found the request consistent with the provisions of the Fiscal Responsibility Act, which allows the Federal Government to borrow domestically to finance budget deficits, provided the funds are directed towards capital and development projects.
“The loan is aimed at funding the shortfall in the approved budget and ensuring that government programmes and projects are not stalled due to lack of funds,” Manu said.
The Senate also adopted a motion moved by Senator Abdul Ningi (Bauchi Central), calling for stronger oversight on how the borrowed funds will be used. The motion mandates the Senate Committee on Appropriations to closely monitor the utilisation of the ₦1.15 trillion loan during the 2025 fiscal year to ensure the money is used strictly for budgeted projects and programmes.
Senator Ningi stressed that effective monitoring of loan utilisation would promote accountability, prevent diversion of public funds, and help Nigeria get full value from its borrowings. “Oversight is key to ensuring that borrowed money translates into visible infrastructure and development, not just figures on paper,” he said.
In the letter President Tinubu sent to the National Assembly on November 4, he explained that borrowing from the domestic debt market—instead of relying entirely on external loans—would help reduce exposure to foreign exchange risks and interest rate volatility. He also said the domestic option would support the implementation of critical government initiatives, including infrastructure, job creation, and social welfare programmes.
The president noted that the 2025 budget, titled “Budget of Renewed Hope II,” focuses on sustaining economic reforms, stimulating growth, and improving public services, especially in transportation, health, education, and energy.
Economic analysts have observed that Nigeria’s growing debt levels remain a major concern. The country’s public debt stock stood at about ₦121 trillion as of mid-2025, according to data from the Debt Management Office (DMO), with domestic borrowing accounting for the largest share.
However, experts say domestic borrowing, if properly managed, could be more sustainable than external debt since it reduces foreign exchange pressure and strengthens local financial markets.
Some lawmakers cautioned the government against over-reliance on borrowing, urging it to improve revenue generation through better tax collection, diversification of exports, and prudent spending. Others argued that loans can be justified if they are tied to productive investments that generate jobs and returns for the economy.
With the Senate’s latest approval, the Federal Government is now cleared to raise funds from local sources such as treasury bills, bonds, and other financial instruments. The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, is expected to oversee the loan’s implementation and ensure compliance with debt management guidelines.
The approval brings renewed attention to Nigeria’s fiscal health as the administration continues efforts to stabilise the economy, curb inflation, and support local industries. Observers say the coming months will show how effectively the Tinubu government balances its borrowing needs with the demand for accountability and long-term economic sustainability.
