Reps okay Buhari’s request for $2.78bn Eurobond, caution against borrowing

The House of Representatives has approved President Muhammadu Buhari’s request to borrow $2.78 billion as part of capital funding for the 2018 budget, even as it cautioned the federal government on the need to reduce its borrowing.

The lawmakers also approved another $82.54 million to refinance the balance of $500 million matured Eurobond in the international capital market.

The approval followed the presentation of a report of the House Committee on Aids, Loans and Debt Management by its Chairman, Adeyinka Ajayi, on Tuesday in Abuja.

On October 9, President Buhari had in a letter to the House sought its approval to raise the amounts.

Read also: REPORT: 2018 budget deficit may widen to N4.4tn as revenue dips

According to the letter, Buhari said the $2.78 billion, as approved in the 2018 budget, would be used to finance deficits and key infrastructure projects in the budget.

The upper chamber had last week approved the same amount for the president, warning against external borrowing.

Similarly, the lawmakers at the lower chamber of the national assembly while approving the President’s requests, urged the federal government to reduce or limit its request for more external borrowings and source for other means of generating revenue internally.

Ripples Nigeria reports that the Eurobond offering is the fifth in less than two years.

Eurobonds are special debt instruments issued in a currency different from the currency of the country or the market in which the bonds are issued.

Data obtained from the Debt Management Office (DMO) showed that the nation’s public external debt portfolio stood at $22.08 billion in June 30, 2018, implying the country’s external debt commitment rose by over 114 percent in the last three years when it recorded $10.32 billion as of June 30, 2015.

 

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