Nigeria adds another $2.86Bn to its humongous foreign debt to fund the fiscal deficit.   

15 October 2018 : Despite the nation’s present foreign debt standing at a humongous $ 22.08 billion, which is already raising quite a few eyebrows from the international community, Nigeria is planning to take an additional $2.86 billion external loan to fund the 2018 budget and finance major infrastructure projects.

In the past two years, this is the 5th external borrowing conducted by the country. The last debt of a whopping $2.5 billion was raised mere 8-months back.

President, Muhammadu Buhari, requested the National Assembly for the approval of a fresh $2,868,540,000 external loan in a letter dated October 9, 2018

The letter reads in part, “Pursuant to Sections 21 (1) and 27 (1) of the Debt Management Office (Establishment Etc) Act, 2003, I hereby request for distinct and specific resolutions of the National Assembly to:

“Issue USD2.786 billion in Eurobonds and other securities in the international capital market for the implementation of New External Borrowing approved in the Federal Government of Nigeria’s 2018 Appropriation Act, for the part-financing of the 2018 budget’s fiscal deficit as well as to finance key infrastructure projects in 2018 budget.

“And issue Eurobonds and other securities in the international capital market for the refinancing of USD82.54 million, being the balance of the five-year, USD 500 million mature Eurobonds.

Africa’s largest economy is searching for methods to cushion the effect of the huge deficit in the record 2018 budget of N9.120 trillion ($29.8 billion). They plan to do this by raising loans and selling state owned assets.

The government is expecting to make N289 billion ($797 million) from the sale of the assets.

Despite International Monetary Fund’s (IMF) warnings regarding the debt levels in African economies, Nigeria instead that it had to borrow to exit economic hardship on its citizens.The debt office also assured that Nigeria’s public debt was being managed under statutory provisions and international best practices, adding that there was no risk of default on any loan.

Reporting for EasyKobo on Monday ,15 October 2018 in Lagos, Nigeria

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