Nigeria eyes debut global sukuk to raise total of $2.8bn, AfDB to lend $500m in budget support

Nigerian President Bola Tinubu has asked parliament to approve $2.3 billion in new loans and authorize the issuance of a $500 million debut sovereign sukuk on international debt markets, according to a letter read to lawmakers on Tuesday just as African Development Bank (AfDB) will lend Nigeria $500 million this year as part of a $1 billion budget support programme, following economic reforms introduced by President Bola Tinubu, an executive director of the bank said. Bode Oyetunde, who represents Nigeria and São Tomé and Príncipe on the AfDB board, said the loan could be approved before year-end. “We have been working strongly to support Nigeria’s very bold and aggressive macroeconomic reforms under President Tinubu. Given all these reforms, it was important to support Nigeria,” Oyetunde told Reuters on the sidelines of the Nigerian Economic Summit in Abuja. They asked us for $1.5 billion. We are able to do $1 billion over two years. Last year, we provided $500 million in budget support. This year, we are looking to do another $500 million, subject to board approval.”
Finance Minister and Coordinating Minister for the Economy, Wale Edun, told an economic summit in Abuja that the government was focusing on green bonds, sukuk, and diaspora bonds, which he said are priced more cheaply than Eurobonds. Last month, Nigeria’s debt office chief told Reuters the country could issue up to $2.3 billion in international bonds before year-end, depending on market conditions. Africa’s most populous country launched its first international bond sale in nearly three years last December but has not tapped global capital markets so far in 2025. Nigeria has improved its fiscal position and earned positive reviews from ratings agencies, driven by reforms introduced by Tinubu.
The government hopes investors will reward its reform efforts with lower yields on future debt issuances. Tinubu’s letter said the new funds would be used to part-finance the budget deficit and refinance maturing Eurobonds due in November. It added that borrowing could be done via the Eurobond market, loan syndication, bridge financing from bookrunners, or directly from international banks. The president said the government would issue the sukuk with or without credit enhancements from the Islamic Corporation, aiming to replicate the success of its domestic sukuk programme in international markets.