FG’s $2.35bn External Borrowing Plan: DMO Explains Eurobond Strategy to Boost Naira, Refinance Debt
The Federal Government’s proposed $2.35 billion external borrowing plan is a carefully balanced strategy aimed at financing the 2025 national budget and refinancing maturing Eurobonds, according to Patience Oniha, Director-General of the Debt Management Office (DMO). She explained that the borrowing plan, submitted by President Bola Tinubu to the National Assembly, includes $1.229 billion in new loans to part-finance the 2025 Appropriation Act and $1.118 billion to redeem Eurobonds issued in 2018 that will mature in November 2025.
Oniha clarified that refinancing through new Eurobond issuance is a normal global practice designed to prevent default and sustain investor confidence. “It’s not unusual,” she said, citing examples of similar moves by Kenya, Cameroon, Gabon, and Angola in recent years. She added that the Tinubu administration may access the funds through various instruments such as Eurobonds, syndicated loans, or multilateral financing, depending on market conditions and advisory guidance.
In recent years, Nigeria has relied more heavily on domestic borrowing to fund deficits, a trend Oniha attributed to post-COVID global market disruptions. “Before COVID, we used to do a 50-50 mix between external and domestic borrowing,” she explained. “But international markets were shut during the pandemic, so we leaned on the local market to fill the gap.” While acknowledging concerns about domestic debt pressure, Oniha maintained that Nigeria continues to attract concessional loans from institutions like the World Bank and IMF, which account for over 40 percent of the country’s external debt stock.
Market analysts say the Eurobond issuance could have a stabilizing effect on the naira and external reserves. The local currency has already appreciated 4.5 percent year-to-date, strengthening to ₦1,475.35/$ as of October 17, 2025, while reserves have grown by $1.8 billion to $42.68 billion, according to Central Bank of Nigeria (CBN) data. Experts such as Ayokunle Olubunmi of Agusto & Co. and Adebowale Funmi of Parthian Securities noted that the borrowing will help ease repayment pressure, improve FX liquidity, and support naira stability—though they warned that it will also expand Nigeria’s external debt obligations.
While the move could enhance short-term fiscal stability, experts urge the government to strengthen revenue generation and fiscal reforms to ensure long-term debt sustainability. Oniha reaffirmed Nigeria’s commitment to responsible borrowing, saying, “We’ll continue engaging investors to ensure the structure works well for both sides in terms of pricing and liability management.” If successful, the Eurobond issuance could reinforce investor confidence, boost reserves, and provide the Central Bank with greater flexibility to manage exchange rate volatility.
source: Business day