The Federal Government has redeemed the $500 million Eurobonds issued to investors in 2011 today, Thursday 28, 2021.
The dollar-denominated bond which matures today will be paid at 6.75 percent, stated the Debt Management Office (DMO). The DMO said the funds for the repayment have been made available to the government.
Experts have attributed Nigeria’s inability to build infrastructure and embark on aggressive developmental projects on the rising cost of servicing debt and poor revenue generation.
The International Monetary Fund (IMF) and World Bank had compelled the Federal Government to raise Value Added Tax (VAT) by 50 percent from 5 percent to 7.5 percent and remove fuel subsidy in a move to up Nigeria’s revenue and reduce costs.
Still, Nigeria’s over-reliance on crude oil and lack of developed industries remains a hindrance to enhancing economic productivity, especially at a period when crude oil is expected to remain between $55 and $60 due to COVID-19 and slow global growth.
The minister of finance, budget and national planning, Zainab Ahmed, said the Federal Government will issue another Eurobonds this year to fund the deficit of the N13.6 trillion appropriation bill for 2021.
Until the economy is properly diversified, Nigeria will continue to rely on loans to fund the budget.