Nigeria to reschedule $3bn debt with more foreign borrowing

Nigeria to reschedule $3bn debt with more foreign borrowing

At last Nigeria has resolved to refinance its $3 billion worth of naira-denominated short-term treasury bills with dollar-loan borrowing as from 2017 to 2020.

In addition to the fact that it costs less to service dollar- denominated treasury bill, the new policy thrust is part of the government programme to fasten the means to economic recovery for a three-year duration.

Finance Minister Kemi Adeosun, disclosing this on Wednesday said her ministry was aiming at borrowing less local currency, the naira, but more in foreign currency.

She said the government could borrow at a cost of 7 per cent overseas, roughly half the interest rate it currently pays locally.

Read also: Court strikes out FG’s $793m TSA suit, awards N1.2m to banks

“As the economy recovers and grows we will be in a much better position to repay instead of just rolling over the debt,” she told reporters after a cabinet meeting where the government approved a spending plan for 2018-2020.

“The government expects the economy to recover this year and grow by 2.2 percent. The International Monetary Fund sees just 0.8 percent growth”.

Adeosun said the government was aiming to restructure its debt portfolio into longer term maturities by borrowing more offshore and less at home to lower cost and also support private sector access to credit to boost the economy.

Adeosun said the government would issue dollar debt as $3 billion worth of naira treasury bills mature. She did not provide a timeframe for this.

She says Nigeria expects a shortfall of $7.5 billion for its 2017 budget. It expects to raise around half of that in foreign loans including from the World Bank and from international debt markets.

“We are not increasing our borrowings. We are simply restructuring. Instead of owing naira, we will be owing dollars,” Adeosun said.


RipplesNigeria ….without borders, without fears

Join the conversation


About the author


We are an online newspaper, very passionate about Nigerian politics, business and their leaders. We dig deeper, without borders and without fears.