Nigeria’s Acting President, Prof. Yemi Osinbajo has written to the National Assembly for approval to float another $500m Eurobond.
Osinbajo said on Wednesday the bond is to be used to fund the 2016 budget.The Nigerian government had floated $1bn Eurobond some weeks ago which was over-subscribed.
President Muhammadu Buhari’s earlier request to borrow $29.96bn to fund some projects in the budget was not approved by the legislature.
In a letter read by the Speaker to the House of Representatives, Mr. Yakubu Dogara, on Wednesday to members, the Acting president said the 2016 Appropriation Act had a deficit of N2.2tn and a borrowing window of N1.8tn,adding that the government wants to take advantage of the favourable market conditions to float a fresh $500m Eurobond to fund the budget deficit.
Osinbajo said in the letter, “The Act also provided for domestic borrowing of N1.1tn and external borrowing of N635.8bn in items 245 and 246, respectively. The Speaker may also wish to note that whilst the approved domestic borrowing has been fully incurred, the N635.8bn external borrowing has not been fully accessed.
“The external borrowing incurred to date consists of $600m from the African Development Bank and $1bn 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.”