FG to borrow fresh $2.8bn for 2018 budget

The federal government is planning to borrow $2.8 billion to fund the deficit of the recently passed 2018 budget.

Patience Oniha, director general of the Debt Management Office (DMO), made this known while speaking to Reuters on Wednesday.

“We will explore all options keeping in mind our twin objectives of extending the tenor of the debt stock and lowering costs,” she said, not providing details.

In 2017, the federal government deployed a number of debt instruments to fund the budget deficit.

These included FGN Savings bond, Eurobond, Green bond, Diaspora bond and Sukuk.

Speaking at the listing of the FGN 30 year $1.5 billion Eurobond and FGN 10-year $1.5 billion Eurobond on the Nigerian Stock Exchange (NSE) in December 2017, Oniha had said the federal government will rebalance its domestic and foreign debt portfolio.

The DG explained that foreign debt would account for 40% of the country’s debt, which would reduce the cost of borrowing. At present, foreign borrowings account for 23% of the country’s debt.

She said the proposed $5.5 billion would be divided into two phases; $2.5 billion as external borrowing for the 2017 budget and $3 billion to repay some of the existing domestic debt.

However, the United States recently increased interest rates, which means that the country might pay higher interest on its fresh loans as compared to 2017 borrowings.