The senate has approved the request of the federal government to borrow $500 million out of the $1 billion Eurobond from the international capital market.
The senate approved of the request after putting it to a voice vote at the committee of the whole on Wednesday.
On February 22, Vice-President Yemi Osinbajo, then acting president, wrote to the national assembly requesting the loan to fund the 2016 budget deficit.
“The external borrowings incurred to date consist of USD 600 million from the African Development Bank and USD 1 billion Eurobond from the International Capital Market (ICM) only,” the letter read.
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“Thus, based on the 2016 appropriation and applying the average exchange rate, there is headroom to access further international funds.
“Following the high over subscription of the recent USD 1 billion Eurobond issuance, we wish to take advantage of favourable market conditions to issuance of Eurobond debt instrument of USD 500 million to fund the implementation of the 2016 budget, which is still ongoing.”
Osinbajo explained that the $500 million would be used as “funding sources” to finance the deficit, including capital expenditure projects as specified in the 2016 budget.
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He added that the Debt Management Office (DMO) and and the government’s appointed transaction parties were working to ensure the best terms and conditions for the country as regards the loan.
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