29 October 2016, Abuja -The Federal Government has $500m commitment for the $1bn Eurobond it intends to issue before the end of the year and any decision to increase the size of the offer will depend on pricing, the Minister of Finance, Mrs. Kemi Adeosun, has said.
The Federal Government is planning to borrow $1bn via Eurobond issuance by the end of the year.
As of Thursday, however, no bank has been appointed to arrange the issue, according to a Reuters report.
“At the moment I’m focused on the $1bn,” Adeosun said in a video recording to an investors’ conference in Lagos.
The country slipped into recession for the first time in 25 years in the second quarter of this year, largely due to low global oil prices. Crude oil sales account for about two-thirds of government revenues.
President Muhammadu Buhari has laid out plans to spend N6.866tn to help pull the country out of recession in a draft 2017 budget sent to the National Assembly.
The Federal Government has struggled to fund the N6.06tn budget set for 2016.
Analysts are sceptical that the government will meet the targets for external borrowing that it has set for the next few years.
Adeosun said the country was moving “further along” with the African Development Bank for a $1bn budget support loan than the World Bank due to scheduling issues.
“We have pushed the World Bank funding into next year’s budget,” she said.
President Muhammadu Buhari had on Monday sent a letter to the National Assembly, seeking to get approval for $30bn external borrowing.
According to the President, the fund is to be spent on infrastructure projects until 2018.
The proposed borrowing includes the sale of Eurobonds worth $4.5bn and budget support of $3.5bn, according to the letter.
The Finance ministry said on Thursday the $30bn borrowing was going to be phased over a three-year period to cover proposed projects between 2016-2018.
Adeosun said Nigeria was interested in tapping funds at concessionary rates to develop infrastructure and that most of the funding it was seeking would carry concessionary terms.
The funding is being sought from multilateral agencies such as the World Bank, Africa Development Bank, Islamic Development Bank, Japan International Co-operation Agency and China Eximbank, according to a statement by the ministry.
Adeosun said expected taxes collection as a percentage of the Gross Domestic Product currently at five per cent would hit seven per cent within three-years and 10 per cent within five years.
The Debt Management Office has said the country can borrow up to $22bn in 2017 from both local and foreign sources without breaching the debt threshold that the government has set for itself.