Senate approves Tinubu’s request to borrow another $516.3m for road project

The Senate on Wednesday approved President Bola Tinubu’s request to secure a $516.3 million loan from Deutsche Bank AG to finance the construction of the Sokoto–Badagry Superhighway, a flagship infrastructure project under his Renewed Hope Agenda.

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The loan will have a tenure of nine years, including a grace period of up to three years, with an interest rate capped at the Chicago Mercantile Exchange (CME) SOFR plus 5.3 per cent annually.

The facility will be backed by insurance from the Islamic Corporation for the Insurance of Investment and Export Credit, the insurance arm of the Islamic Development Bank.

Deutsche Bank AG is a German multinational investment bank and financial services company headquartered in Frankfurt. It is dual-listed on the Frankfurt Stock Exchange and the New York Stock Exchange.

The decision was taken after considering a report of the Senate Committee on Local and Foreign Debts, presented during the plenary by Kebbi Central Senator, Adamu Aliero, a member of the committee.

Mr Tinubu had initially submitted the request through a letter read by the Senate President, Godswill Akpabio, during plenary last Thursday.

The president said the proposed highway is a 1,000-kilometre high-capacity carriageway linking Sokoto, Kebbi, Niger, Kwara, Oyo, Ogun, and Lagos states, stretching from Illela to Badagry.

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The federal government is also expected to provide counterpart funding of ₦265 billion for land acquisition, compensation, and related infrastructure.

The request comes barely a month after lawmakers approved another $6 billion external borrowing plan by the administration. Of that amount, $5 billion is to be sourced from First Abu Dhabi Bank to support the national budget, while a $1 billion export finance facility from the United Kingdom, arranged by Citibank, is earmarked for the rehabilitation of Tin Can Island Port and the Lagos Port Complex.

Committee recommendation

Presenting the report, Mr Aliero said the committee thoroughly examined the president’s request, including its financial and debt implications, and found it worthy of approval.

He said the loan would support the construction of the superhighway and improve Nigeria’s transportation infrastructure.

The Senate president subsequently put the request to a voice vote, with a majority of senators voting in favour of its approval.

Nigeria’s debt profile

The loan approval comes amid concerns about the country’s rising debt burden and debt-servicing pressures.

READ ALSO: FOR THE RECORD: 2026 Budget Speech by President Bola Tinubu

According to the Debt Management Office, Nigeria’s total public debt stood at over N87 trillion (about $113 billion) as of mid-2023, following the inclusion of Ways and Means advances from the Central Bank of Nigeria. The figure has continued to climb, driven by new borrowings and exchange rate adjustments.

Although Nigeria’s debt-to-GDP ratio remains moderate compared to some peers, analysts have repeatedly flagged the country’s weak revenue base as a major risk. A significant portion of government revenue is spent on servicing debt, raising concerns about fiscal sustainability.

The International Monetary Fund and the World Bank have both advised Nigeria to prioritise revenue mobilisation, improve tax collection, and ensure that new borrowings are tied to productive investments capable of generating returns.

In recent years, the federal government has increasingly turned to external borrowing to finance budget deficits, fund infrastructure projects, and refinance existing obligations. Officials argue that such loans, particularly those with relatively lower interest rates, help reduce the cost of debt and support critical sectors of the economy.