The
Acting President has asked the Federal House of Representatives for
approval to borrow $500 million from the International Capital Market
(ICM).
Yemi Osinbajo
Acting President Yemi Osinbajo has requested the National
Assembly’s approval for the issuance of US$ 500 million Eurobond in the
international capital market for the funding of 2016 budget deficit.
In a letter to the Speaker, House of Representatives, Yakubu
Dogara, Osinbajo said that the proceeds of the Eurobond would be used to
execute some capital projects as specified in the 2016 Appropriation
Act.
“Following the high oversubscription of USD one billion
Eurobond issuance, we wish to take advantage of favourable market
conditions to issue a Eurobond debt instrument of USD 5OO million.
“This will fund the implementation of the 2016 budget, which is
ongoing. Given that the implementation of the 2016 budget is still
ongoing, we plan to issue the Eurobond between February and March 2017,
subject to market conditions.
“This is in order to meet the governments approved capital expenditure funding plan,’’ the letter stated.
It said that the 2016 Appropriation Act provided for a deficit of
N2,204.742 billion and new borrowings of N1,818. 675 billion
respectively.
It also said that the Act also provided for domestic borrowing of
N1,182. 798 billion and external borrowing of N635. 877 billion.
“While the approved domestic borrowing had been fully incurred,
the N635.877 billion external borrowing has not been fully accessed.
“The external borrowing incurred to date consists of USD 600
million from the African Development Bank and USD 1 billion Eurobond
from the international capital market only.
“Thus, based on the 2016 appropriation and applying the average
exchange rate, there is headroom to access further international
funds,’’ the letter read in part.
The letter added that being a market-based instrument, the terms
and conditions of the Eurobond may only be determined at the point of
issuance.
“However the Debt Management Office and the Federal
Government’s appointed transaction parties to the issuance are committed
to working assiduously to secure the best terms and conditions for the
Federal Republic of Nigeria,’’ it stated.
-NAN
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