Nigeria will be seeking to borrow $2.2 billion from the international debt market— including a potential Eurobond and Sukuk bond offer, with just six weeks left in the year.
The Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, disclosed this week that the Federal Executive Council (FEC) approved it and hopes that the exercise can still be concluded this year.
Mr Edun after the last FEC meeting in Abuja said, “If the external borrowing approval is given, it will be done this year, as soon as possible after approval.”
The two borrowing memoranda, he said, were presented to the FEC were some combination of the Euro bond offer and the Sukuk bond offer, and probably a Euro bond of about $1.7 billion.
“Sukuk financing of another $500 million the actual makeup of the financing which will be done as soon as the National Assembly has considered and hopefully approve the borrowing plan,” he said.
He explained that the actual combination of instruments that would be raised would depend on what the advisors would say about market conditions at the time of the decision to enter the market.
“Of course, earlier in the year, we had shown the resilience of the Nigerian financial markets, and the depth of their capacity, the increased complexity and sophistication by having a domestic issuance of dollar bonds, which attracted Nigerian investors from far and wide.
“Likewise, being able to access the international capital market is also a sign of the acceptance and the support for the macroeconomic programmes of President Bola Tinubu-led administration,” he said
The minister said that the economic recovery and revival programme to turn around the economy focused on macroeconomic pillars of market pricing of the premium motor spirit (PMS) and of foreign exchange.
He also disclosed that FEC had approved the Ministry of Finance’s incorporated real estate investment fund.
According to him, the fund is the basis for the revival and the return of long-term mortgage financing to the Nigerian economy.
“The Morph Real Estate Investment Fund is going to be, in the first instance, a N250 billion fund that will provide low-cost and long-term mortgages to Nigerians that want to acquire houses.
“It will help to complete or help to fill part of the gaping 22 million unit housing deficit. Of course, it will create jobs and stimulate economic growth.
“It will also pave the way for other investors in the private sector to come in and participate in the all-important housing construction industry with huge benefits and knock-on effects throughout the whole economy.
“Long-term investors have the opportunity to earn market rates of interest on investment. This is going to be blended with seed funding of N150 billion,” he said.