By Dickson Pat
President Bola Tinubu has formally written to the House of Representatives seeking legislative approval for a substantial external borrowing plan of over $21.5 billion and a domestic bond issuance of ₦757.9 billion to settle long standing pension liabilities under the Contributory Pension Scheme ,CPS.
In a letter read on the floor of the House on Monday, President Tinubu underscored the urgent need for strategic borrowing to finance critical sectors of the economy amid growing fiscal constraints and the lingering aftershocks of the fuel subsidy removal.
“The 2025–2026 borrowing plan covers all sectors with specific emphasis on infrastructure, agriculture, health, education, water supply, growth, security, and employment generation, as well as financial and monetary reforms”, Tinubu stated in the communication addressed to the Speaker of the House, Rt. Hon. Tajudeen Abbas.
According to the President, the proposed loan is essential to bridge the yawning infrastructure gap and stimulate economic productivity across the country’s 36 states and the Federal Capital Territory ,FCT.
“In light of the significant infrastructure deficit in the country and the paucity of financial resources needed to address this gap amid declining domestic demand, it has become essential to pursue prudent economic borrowing to close the financial shortfall”, the President noted.
Breakdown of the Borrowing Plan
The external financing arrangement comprises: USD $21,543,647,912; EUR €2,193,856,324.54, JPY ¥15 billion and a grant of €65 million
President Tinubu emphasized that these funds will be invested in priority sectors that have the potential to yield long-term economic dividends, particularly in transport, health care, education, water supply, and nationwide rural development initiatives.
“This initiative aims to generate employment, promote skill acquisition, foster entrepreneurship, reduce poverty, and enhance food security, as well as to improve the livelihoods of Nigerians”, Tinubu asserted.
He added that the removal of fuel subsidies, though painful in the short term, created a fiscal vacuum that necessitates carefully calibrated borrowing to prevent economic stagnation. ₦757.9bn Domestic Bond for Pension Arrears
In a separate but related request, President Tinubu also sought the House’s approval for the issuance of Federal Government bonds worth ₦757,983,246,572 to address accrued pension liabilities under the CPS, which have continued to mount over the years due to persistent revenue shortfalls.
“The House of Representatives is invited to note that the federal government has not been compliant with the implementation of the above provisions of the PRA 2014 over the years due to revenue challenges leading to accumulation of pension arrears with the attendant ICU retirees”, the letter stated.
The proposal, which has already received the nod of the Federal Executive Council ,FEC, at its meeting on February 4, 2025, is aimed at restoring the confidence of pensioners in the Nigerian pension system.
“It will enable the Federal Government of Nigeria to meet obligations under the CPS and restore confidence in the pension industry”,Tinubu wrote.
“It will also ensure positive welfare even for the retirees, as this will enable them to meet their basic needs… improve health and avoid untimely death”.
The President lamented the hardship faced by many retirees due to accumulated arrears and emphasized the government’s responsibility to fulfil its pension obligations.
“This is not just an economic issue; it is a moral obligation to those who served this nation with dedication. Restoring their dignity through prompt pension payments is a commitment we must uphold”, he added.
The House has since referred the twin requests to the Committee on National Planning and Economic Development and the Committee on Pensions for further legislative scrutiny and recommendations.
