NAIJA NEWS
Nigeria’s external debt stock is projected to rise to $45.1bn by the end of 2024 as the Federal Government seeks additional funding to bolster the economy, according to the Debt Management Office (DMO).
The DMO revealed in its latest report that the country’s external debt increased by $780m in the second quarter of 2024, climbing from $42.12bn in March to $42.9bn in June.
In a new development, the Federal Executive Council (FEC) last Thursday approved a $2.2bn external borrowing plan to finance the Federal Government’s 2024 Appropriation Act.
The Minister of Finance, Wale Edun, announced the approval during a briefing with State House correspondents at the Aso Rock Villa in Abuja.
He disclosed that the borrowing plan included a mix of Eurobond and Sukuk offerings, valued at $1.7bn and $500m, respectively.
“These funds are expected to bolster Nigeria’s fiscal stability amid ongoing economic reforms,” Edun stated, adding that the allocation between the instruments would depend on market conditions and advice from transaction advisors.
He further noted that the borrowing plan is subject to approval by the National Assembly, emphasizing that the funds would play a key role in addressing fiscal challenges and supporting critical infrastructure projects.
“The first (memo) was to complete the borrowing programme of the FG in terms of the external borrowing with the approval of the $2.2bn financing programme made up of access to the international capital market for some combination of the Euro bond offer and the Sukuk bond offer.
“A Euro bond of about $1.7bn and Sukuk financing of another $500m the actual makeup of the financing which will be done as soon as the National Assembly has considered and seen fate to hopefully approve of the borrowing plan and the external borrowing approval is given, it will be done this year, as soon as possible after approval.
“The actual combination of instruments that will be raised will depend on what the advisors, the transaction advisors, the commercial advisers, and what they say about market conditions at the time we decide and we want to enter the market,” Edun explained.
