President Bola Tinubu has written to the Senate asking it to approve his plan to borrow $2.2 billion.
Senate President Godswill Akpabio announced this at plenary on Tuesday.
Tinubu said the request was in accordance with the provisions of Sections 21(1) and 27(1) of the Debt Management Office (DMO) (Establishment, ) Act, 2003, and the approval of the Federal Executive Council..
“I write to request for a resolution of the National Assembly to raise the sum of N1.7 trillion, equivalent of 2.2 billon dollars at the budget exchange rate of one dollar to N800 provided as new external borrowing in the 2024 appropriation act to part finance the budget deficit of N9.179 trillion,” the president’s letter read.
According to Tinubu, the funds were needed to give more impetus to the ongoing implementation of the projects and programmes in the 2024 Appropriation Act designed to stabilise the economy.
He said the key projects which the fund will be used for are in priority sectors of the economy such as power, transport, agriculture, defence and security.
” It is also important to add that the proceeds will increase the accrual to the external reserves as the proceeds will be received into the Central Bank of Nigeria’s (CBN) account, and thereby support the naira exchange rate,” he said.
Tinubu said the plan was to raise the new external borrowing from a combination of commercial sources, such as issuance of Eurobonds, Sovereign Sukuk, International Capital Market (ICM) among other sources.
Tinubu said Nigeria could raise all or part of the new external borrowing fund through the issuance of eurobonds in the ICM.
“Nigeria has been a regular issuer in the ICM and had raised 16.92 billion dollars out of which 15.12 billion dollars is outstanding.
”The ICM is now open to countries similar to Nigeria, and so far, Cote d’Ivoire, Benin, Kenya, and Cameroon have issued Eurobonds in the ICM in 2024.
“A debut Sovereign Sukuk of up to 500 million dollars in the ICM with credit enhancement from the Islamic Corporation are for Insurance of Investment and Export Credit (ICIEC), subject to the terms and conditions,” he said.
Tinubu said lead managers such as Citigroup Global Markets Ltd, Goldman Sachs, JP Morgan and Standard Chartered have been appointed through an open competitive bid to advise on the issuance of eurobonds, where it becomes necessary.
