President Bola Tinubu has formally approached the National Assembly of Nigeria seeking approval for a fresh domestic loan of around ₦1.15 trillion to help finance the 2025 budget deficit. The move forms part of a broader financing strategy for the year ahead, aimed at bridging fiscal gaps while meeting debt obligations.

In the letter to lawmakers, Tinubu lays out how this domestic borrowing request sits alongside foreign‐funding efforts already under way. While external borrowing plans such as the issuance of sovereign bonds and a debut sukuk are drawing much attention, the domestic loan request highlights the government’s reliance on internal markets to raise funds.

Under the 2025 budget proposal, the federal government aims for revenue of about ₦34.82 trillion while the total expenditure is projected at around ₦49.70 trillion, leaving a deficit of approximately ₦13.39 trillion. That gap, roughly 3.9 % of GDP, has necessitated both domestic and external borrowing.

By tapping the domestic debt market to raise ₦1.15 trillion, the government is attempting to spread its funding sources and reduce over‐dependence on external financing. Analysts note that domestic borrowing can reduce foreign‐exchange risk, though it may increase pressure on interest rates within Nigeria.

The Tinubu administration’s letter to the National Assembly states that the loan is in line with the borrowing provisions of the 2025 Appropriation Act and is meant to provide liquidity for key spending priorities. These include infrastructure, human capital development, security and servicing existing debt. The domestic loan forms part of the total new borrowing envelope established in the Appropriation Act.

Market watchers will be monitoring how the debt is structured, whether it will be in short‐ or medium‐term instruments, how the interest rate will be set, and the impact of this borrowing on the overall debt servicing burden. Nigeria’s public debt is already projected to exceed ₦180 trillion, and additional borrowing may further influence debt sustainability metrics.

As Tinubu pushes for both domestic and external loans, lawmakers are expected to engage in committee reviews and deliberate the resolution in the coming weeks. The next stages will include discussions on terms, modalities of issuance and how the funds will be deployed.

The domestic loan request marks another chapter in the government’s financing strategy for 2025, blending internal and international funding options to cover the budget shortfall without placing undue strain on any single channel.