The Federal Government has stepped up its aggressive borrowing measures as Debt Management Office, DMO, indicated that it would be raising additional USD2.5 billion (about N917 billion) through a fresh Eurobond offer in November 2017
Oniha said the borrowing would enable the country bridge funding gap in the 2017 budget.
She said the proposed Eurobond issuance would complement the USD1.5 billion raised from the international market in March 2017, adding that the nation’s Treasury Bills portfolio currently stood at N3.7 trillion, adding that DMO planned to refinance it with foreign borrowing to reduce pressure on the domestic market.
Sukuk Bond borrowing
On the N100 billion Sukuk Bond, Oniha said the Federal Government had identified 25 road projects to be funded with the proceeds.
The roads, according to her, include Ore-Sagamu Road, Kaduna Bypass, Enugu-Port-Harcourt Road, Kano-Maiduguri and Benin-Lokoja Road, among others.
Oniha said the acceptance of the Sukuk Bond offer was an indication of the viability of the instrument as an investment option, as well as a demonstration of utmost faith in the economy. The seven-year Sukuk attracted a subscription of N105.88 billion according to the DMO.
From The Vanguard
Why are they borrowing money?what happened to all the monies in the TSA?what is all this?
Where are the recovered looted funds?
ReplyDeleteMay be I don't understand the algoritms but the scenario being painted is that our debt profile is rising at the same time our foreign reserve is rising too. Will we not eventually have to draw from our reserve to service our debts in future? If that's the case why not do so now; why not draw from our reserve and forgo the repayment of an amount borrowed plus interests accrued?
ReplyDeleteNa my reasoning be dat but I no know weda e pure.
Stella, I Tire O
ReplyDelete@ Stella, you can call for economists (bvs)to explain. These are not "common sense" issues. I quite understand that borrowing to fund infrastructure is a good, it makes for accountability.
ReplyDeleteMonies in the TSA still goes back to agencies of govt as recurrent expenditure for salaries, benefits & allowances.
The foreign reserve account pays for largely pays for import, stabilizes currency & investors in Nigeria exchanges their naira for dollar from the foreign reserves. The foreign reserve is largely funded from sales of crude oil.