The Nigerian Senate has given its official approval for a major new borrowing plan proposed by President Bola Tinubu, authorizing the sourcing of N1.15 trillion from the domestic debt market. This decisive move, which took place on Wednesday, is aimed squarely at filling a significant deficit gap in the nation's 2025 budget.
How the Loan Approval Unfolded
The approval process was set in motion after the Senate carefully considered a report from its Committee on Local and Foreign Debts. The committee, which is chaired by Senator Aliyu Wamakko (APC, Sokoto North), had the request referred to it just one week prior. During the plenary session, the committee's vice chairman, Senator Haruna Manu (PDP, Taraba Central), presented the findings, which strongly recommended that the Senate grant the President's borrowing request to address the financial shortfall.
The Root of the Budget Deficit
The need for this substantial loan stems directly from an increase in the size of the 2025 budget. The National Assembly had passed a total expenditure of N59.99 trillion for the 2025 Appropriation Act. This figure represents a significant increase of N5.25 trillion over the initial proposal of N54.74 trillion that was submitted by the executive arm of government.
This budgetary expansion created a total deficit of N14.10 trillion. While a borrowing plan of N12.95 trillion had already been approved to cover part of this gap, it left an unfunded deficit of approximately N1.15 trillion, which is the precise amount the new loan is intended to cover.
Presidential Request and Legal Grounds
President Tinubu's formal request for this borrowing was initially communicated to the Senate in a letter read during plenary on November 4. In the letter, the President cited the Fiscal Responsibility Act (FRA) of 2007 as the legal basis for his request, specifically pointing to Section 44, which mandates National Assembly approval for all new federal government borrowings.
The letter explicitly stated the necessity to "increase the domestic borrowing limit in the 2025 budget by N1.147 trillion to close this gap." Following the reading of the letter, the President of the Senate, Senator Godswill Akpabio, directed the Committee on Local and Foreign Debt to scrutinize the request and report back within one week, a deadline that was met leading to the final approval.
