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Nigeria to Add $2.7bn Foreign Debt in 2019

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  • Nigeria to Add $2.7bn Foreign Debt in 2019

The Debt Management Office (DMO) on Wednesday said the Federal Government will add $2.7 billion (N824.82 billion) foreign loan to Nigeria’s current debt in 2019.

In a statement released on Wednesday in Abuja, DMO said the government will borrow from multilateral and bilateral sources, while the remaining amount would be raised via commercial sources such as Eurobonds.

The statement was in response to a report that the DMO had ruled out Eurobonds in 2019.

The DMO said the move to borrow $2.7 billion from external sources was stipulated in the recently signed 2019 Appropriation Bill.

The statement read: “For the records, the 2019 Appropriation Act provides for new external borrowing of N824.82bn (the equivalent of $2.7bn at USD/N305).

“Consistent with the Debt Management Strategy of reducing debt service cost, the plan for raising the new external borrowing is to first access cheaper funding from multilateral and bilateral lenders as may be available.

“Thereafter, any balance will be raised from commercial sources which may include securities issuance such as Eurobonds in the International Capital Market.”

The Debt Management Office added that the country will continue to focus on foreign borrowing to reduce borrowing cost while saying Eurobonds and other commercial sources are secondary options.

Nigeria’s debt profile currently stood at N24.39 trillion as of December 31, 2018. The number rose by 100 percent from N12.12 trillion on June 30, 2015 under the current administration.

Therefore, with N824.82 billion additional loan in 2019, Nigeria’s total debt will hit N25.21 trillion by the end of 2019.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.