President Bola Tinubu has written to the House of Representatives, seeking their approval for a new external loan of $21.5 billion, along with a domestic bond issuance of ₦757.9 billion aimed at addressing pending pension obligations.
In his letter to the House, President Tinubu underscored the strategic importance of the borrowing plan for 2025–2026, emphasizing its relevance across critical areas of the economy.
“The borrowing strategy for 2025–2026 encompasses all sectors with particular focus on infrastructure, agriculture, health, education, water supply, growth, security, job creation, and financial and monetary reforms, among other priorities,” stated the President.
Tinubu specified that the overall amount requested under the external borrowing scheme includes $21,543,647,912, EUR 2,193,856,324.54, and 15 billion Japanese Yen, along with a grant of 65 million EUR.
He pointed out that the suggested borrowing is vital due to the elimination of fuel subsidies and their economic consequences.
“Given the considerable infrastructure shortfalls in the nation and the limited financial resources required to amend this deficiency amid waning domestic demand, it has become imperative to engage in prudent economic borrowing to bridge the financial gap,” the president stated.
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Tinubu reassured lawmakers that the intended funds would be directed toward vital infrastructure developments, particularly in the rail sector, healthcare, and comprehensive development initiatives throughout all 36 states and the Federal Capital Territory.
“This project aims to create jobs, facilitate skill development, stimulate entrepreneurship, alleviate poverty, strengthen food security, and enhance the overall welfare of Nigerians,” he emphasized.
In a related development, President Tinubu also requested the consent of the House for the issuance of federal government bonds in the local market to address accrued pension obligations under the contributory pension scheme, which stands at ₦757,983,246,572.
Referring to the Pension Reform Act, 2014, Tinubu mentioned that the government has struggled to meet certain legal pension requirements due to revenue constraints, resulting in a backlog of payments and heightened difficulties for retirees.
“The House of Representatives is asked to recognize that the federal government has faced challenges adhering to the mandates of the Pension Reform Act, 2014, in recent years due to revenue constraints, resulting in the accumulation of pension arrears affecting retirees,” he noted.
He further mentioned that the bond issuance proposal is aimed at resolving these liabilities and had been sanctioned by the Federal Executive Council during its meeting on February 4, 2025.
The president stated that clearing the pension arrears would enhance the well-being of retirees, bolster trust in the pension framework, and infuse liquidity into the economy.
“This will allow the federal government to fulfill its responsibilities under the contributory pension scheme and restore faith in the pension sector.
“It will also secure better living conditions for retirees, as it will enable them to satisfy their fundamental needs, improve health, and prevent premature death,” the letter added.
President Tinubu finished by urging lawmakers for their prompt endorsement, guaranteeing them of his government’s dedication to openness and responsibility.
The proposal has been sent to the House Committee on National Planning and Economic Development as well as the Committee on Pensions for additional legislative inputs.
