Both chambers of the National Assembly on Wednesday approved
the request by President Muhammadu Buhari for a $500m Eurobond.
Vice President Yemi Osinbajo had made the request as acting
President, while Buhari was away on medical vacation in the United Kingdom.
The bond, as explained in a letter to the Senate and House
of Representatives, is to be accessed from the international capital market and
used to fund the deficit in the 2016 budget in line with the borrowing plans
already prepared for that purpose.
The letter to the Senate read in part, “The Senate may wish
to refer to item 229 and 244 of the 2016 Federal Government of Nigeria’s
Appropriation Act, which provided for a deficit of N2.204bn and new borrowing
of N1.818bn, respectively. The Act also provided for domestic borrowing of
N1.182bn and external borrowing of N635bn in line with item 245 and 246,
respectively.
“The Senate may also wish to note that while the approved
domestic borrowing has been fully incurred, the N635bn on external borrowing
has not been fully accessed. The external borrowing incurred today consists of
$600m from the African Development Bank and $1bn Eurobond for the international
capital market only.
“The Senate may wish to note that the proceeds of the
Eurobond are to be used as funding sources to finance the budget deficit,
including capital expenditure projects, as specified in the 2016 Appropriation
Act.”
While raising the motion for the approval on Wednesday, the
Deputy Senate Leader, Senator Bala Ibn Na’Allah, said due to the urgency of the
request, it was necessary for the lawmakers to approve the bond.
The Deputy President of the Senate, Senator Ike Ekweremadu,
who presided over the session, put the request to voice vote and it was
granted.
In approving the request, the House of Representatives
recalled that while the domestic borrowing had been incurred, the remaining
N2.204tn external borrowing had not been fully accessed.
The Speaker, Mr. Yakubu Dogara, presided over the session
where the Eurobond request was approved.
A report of the Committee on Loans/Aids and Debt Management,
which the House acted upon, observed that there were no risks in accessing more
funds.
“Based on the 2016 Appropriation Act, and applying the
average exchange rate, there is a headroom to access further international
funds,” the report stated.
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