The Senate has approved the sums of $2.786 billion and $82.54million as the New External Capital Raising from the International Market as approved in the 2018 Appropriation Act to refinance the balance of N500million matured Eurobond following the recommendations of its Committee on Local and Foreign Debt.
Presenting the report at the plenary session of Wednesday, 17 October 2018, Chairman of the Committee, Sen. Shehu Sani (APC: Kaduna) informed the Senate that the mandate of the Committee was to consider and review the request of President Muhammadu Buhari in respect of the issuance of the said monies.
Sen. Sani explained to the Senate that the Committee had received briefs and submissions from representatives of the Minister of Finance and the Director General, Debt Management Office (DMO) who observed that the proposed External Capital Raising of $82.54million had matured in the International Capital Market with an interest rate of 5.125%, while, the sum of $2.786 billion was needed to partly finance the 2018 Budget with key focus on some strategic infrastructural projects.
Furthermore, he noted that the Committee had arrived at a finding that the external capital raising of $2.786 billion will reduce Nigeria’s debt portfolio and further contribute to the implementation of the Debt Management Strategy of the Federal Government which seeks to reduce the cost of borrowing, lengthen the maturity of public debt stock and help increase Nigeria’s external reserve.
Although he requested that the Senate approves the issuance of the said funds, he urged the Federal Government to ensure that further requests for external borrowing were limited and called for alternative sources for generating revenue internally.
Following his submissions, the Senate also resolved to conduct an “Oversight Week” during which it would carry out visits to relevant Ministries, Departments and Agencies (MDAs) that would be accessing these funds to ensure they are expended judiciously. The Senate stated that the date would be communicated subsequently.
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