The Acting President, Professor Yemi Osinbajo, yesterday sought the approval of the National Assembly for the issuance of USD 500 million Eurobond in the International Capital Market (ICM) to fund the 2016 budget deficit.
Osinbajo, in a letter read by Speaker, Yakubu Dogara, at the resumption of plenary on Wednesday disclosed that he intends to commence the issuance of the Eurobond between February and March 2017 subject to market conditions in order to meet the approved capital expenditure funding plan as specified in the 2016 budget.
Justifying the proposal, he referred the Speaker to the line items 229 and 244 of the 2016 Federal Government of Nigeria (FGN) Appropriation Act, which provided for a deficit of N2,204,742 trilion and new borrowings of N1,818.675 trillion, respectively.
The Acting President explained that the 2016 Appropriation Act also provided for domestic borrowing of N1.182 trillion and external borrowing of N635.877 billion in line items 245 and 246, respectively.
He further stated that while the approved domestic borrowing has been fully incurred, the N635.877 billion external borrowing has not been fully accessed, adding that the external borrowing incurred to date consist of $600million from the African Development Bank and USD 1billion Eurobond from the international capital market (ICM) only.
While arguing that there is headroom to access further international funds, Osinbajo noted that there was a need to take advantage of favourable market conditions to issue the Eurobond debt instrument of $500 million to fund the implementation of the 2016 capital budget whose lifespan is still on-going.
The Acting President who made references to previous issuances of such Euro bonds in January 2011, July 2013 and February 2017 thereby, assured that he would work in tandem with the Debt Management Office (DMO) and government appointed transaction parties assiduously to secure the best terms and conditions for the federal government.
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