Tinubu seeks Senate approval of new external borrowing plan of $2.2bn
President Bola Tinubu has sought the approval of the Senate for the implementation of a 2.2 billion dollar new external borrowing plan.
Tinubu’s request is contained in a letter addressed to President of the Senate, Godswill Akpabio, and read at plenary on Tuesday.
The letter is titled, “Request for the resolution of the National Assembly for the implementation of external borrowing of about 2.2 billion dollars in the 2024 Appropriation Act.”
The President said the request is 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 a resolution of the National Assembly to raise the sum of N1.7 trillion, equivalent to 2.2 billion 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 said the funds were needed to give more impetus to the ongoing implementation of the projects and programs in the 2024 appropriation act, which were designed to stabilise the economy.
He said the key projects to which the proceeds would be deployed formed the 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 the plan was to raise the new external borrowing from a combination of commercial sources, such as the issuance of Eurobonds, sovereign sukuk, and the 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 has raised 16.92 billion dollars, out of which 15.12 billion dollars are 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 is for Insurance of Investment and Export Credit (ICIEC), subject to the terms and conditions,” HR said.
The President 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.
