FG TO BORROW $2.8 BILLION TO FUND 2018 BUDGET

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The borrowing spree of the Buhari led government is showing no sign of abating, as the federal government is set to borrow $2.8 billion to fund part of the deficit of the recently signed 2018 budget.

Director General of the Debt Management Office (DMO), Mrs Patience Oniha made this known Wednesday while speaking with Reuters.

“We will explore all options keeping in mind our twin objectives of extending the tenor of the debt stock and lowering costs,” she told Reuters, without providing details.

In 2017, the FG embarked on borrowing from multiple sources to fund the budget. Such loan instruments included FGN Savings bond, Eurobond, Sukuk, Green bond, and Diaspora bond.

December last year, while 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), Mrs Oniha assured that the FG was poised to rebalance its foreign and domestic debt portfolio.

At the time, Mrs Oniha said the rebalancing objectives is to see that foreign debt account for 40% of Nigeria’s debt portfolio as against the current rate of 23%. This she said would reduce the FG’s cost of borrowing, being that the interest rate for foreign loan is very low.

However, the United States Reserve bank recently increased interest rates, which implies that the FG would pay a higher interest rate on new loan.

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