The Nigerian Senate has officially approved President Bola Tinubu’s request for a loan amounting to ₦1.77 trillion (approximately $2.2 billion) aimed at financing the budget deficit for the 2024 fiscal year. This decision was made during a plenary session on Thursday, following the presentation of a report by the Senate Committee on Local and Foreign Debts, chaired by Senator Aliyu Wamakko.

The funds will be utilized to address a significant portion of the ₦9.7 trillion budget deficit outlined in the 2024 Appropriation Act. The total budget for the year is set at ₦28.7 trillion.

The loan will be sourced through Eurobonds in the international capital markets and potentially through other financial instruments, including sovereign Sukuk and bridge loans, depending on market conditions.

In his request, President Tinubu emphasized that the loan is crucial for ongoing projects and is aligned with the government’s Debt Management Strategy. This strategy aims to reduce borrowing costs, extend the maturity of public debt, and enhance Nigeria’s foreign reserves.

The Senate committee recommended the approval without any dissenting voices, highlighting the necessity of the loan for the completion of critical infrastructure projects and the overall economic stability of the country.

The loan will be executed at an official exchange rate of $1.00 to ₦1,640, which is intended to facilitate the implementation of capital projects as specified in the budget

The swift approval of this loan request reflects the National Assembly’s recognition of the urgent financial needs of the government as it seeks to bolster economic growth and manage its fiscal responsibilities effectively.