THE Presidency has requested the approval of the National Assembly for the issuance of $500million Eurobond in the international capital market for the funding of the 2016 budget deficit.
This was contained in a letter signed by the Acting President, Professor Yemi Osibanjo, to the Speaker of the House of Representatives, Hon Yakubu Dogara, and read at the plenary yesterday,
The presidency explained that the proceeds of the Eurobond “are to be used as funding sources to finance the budget deficit including capital expenditure projects as specified in the 2016 Appropriation Act.”
According to the letter, “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.”
It stated that “the 2016 Appropriation Act provided for a deficit of N2, 204.742billion and new borrowings of N1, 818.675billion respectively.”
It added that the Act also provided for domestic borrowing of N1, 182.798billion and external borrowing N635.877billion.
According to it, “while the approved domestic borrowing had been fully incurred, the N635.877billion external borrowing has not been fully accessed.
The external borrowing incurred to date consists of $600million from the African Development Bank and $1billion 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 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,” the letter read.
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