Nigeria plans to access cheaper foreign loans to help part fund its 2019 budget and tap Eurobonds if necessary to cover any shortfall, the debt office said in a statement on Wednesday.
The emailed statement comes a day after The Director-General of the Debt Management Office (DMO) said the country had no plans to return to the international market this year. She made the comments at a conference in Nigeria’s commercial capital, Lagos.
But, just a few days ago, the debt office had said it has no plans to return to Eurobonds market this year after a sixth outing in November 2018 helped to raise the sum of $2.86bn. Oniha, disclosed this while speaking during the Islamic Finance Conference in Lagos.
According Oniha, the decision not to return to the Eurobond market was to allow the government tap concessionary long-term loans to finance its 2019 budget in addition to borrowing locally.
In the meantime, foreign borrowing to fund the 2019 budget has been pegged at N802 billion.
Note that in 2016, the Federal Government of Nigeria approved a three-year plan to borrow more foreign debts. The plan was to ensure that 40 percent of its loans come from outside the country sources as part of an effort to lower borrowing costs whilst funding record-high budgets.
In 2017, Nigeria sold $3 billion in Eurobonds, part of which was used to fund its budget that year. It then followed that up with a $2.5 billion Eurobond sale last year (2018) which was used to refinance local currency bonds at a lower cost.
Meanwhile, just recently the DMO had, on behalf of the Federal Government, listed some Eurobonds in a dual-tranche of $2.50 billion and a triple-tranche of $2.86 billion on both the FMDQ Securities Exchange and the Nigerian Stock Exchange (NSE).
Speaking during the listing on the FMDQ in Lagos, Oniha said that the bonds were raised for the refinancing of the country’s domestic debt.No tags for this post.