-2.1 C
New York City
Thursday, May 23, 2024
Home NEWS Nigeria Nigeria to Refinance $3 Bln Worth of T-Bills with Dollar Debt: Minister

Nigeria to Refinance $3 Bln Worth of T-Bills with Dollar Debt: Minister

[dropcap]N[/dropcap]igeria plans to refinance $3 billion worth of maturing Naira-denominated short-term treasury bills with dollar borrowing of up to three years’ maturity, to lower costs and improve its debt position as the economy recovers from a recession.

Nigeria’s Finance Minister Kemi Adeosun speaking at a news conference in Lagos, Nigeria,

Finance Minister, Kemi Adeosun said on Wednesday she was aiming to borrow less in Naira and more in foreign currency. She said the government could borrow at a cost of 7 percent overseas, roughly half the interest rate it currently pays locally.

“As the economy recovers and grows, we will be in a much better position to repay instead of just rolling over the debt,” she told reporters after a cabinet meeting where the government approved a spending plan for 2018-2020.

Dollars have been in short supply in Nigeria since the price of crude oil, the main source of hard currency, plunged in mid-2014, triggering a currency crisis, an exodus of foreign investors and its first recession in 25-years.

The government expects the economy to recover this year and grow by 2.2 percent. The International Monetary Fund sees just 0.8 percent growth.

Adeosun said the government was aiming to restructure its debt portfolio into longer term maturities by borrowing more offshore and less at home to lower cost and also support private sector access to credit to boost the economy.

Adeosun said the government would issue dollar debt as $3 billion worth of naira treasury bills mature. She did not provide a timeframe for this.

Nigeria expects a shortfall of $7.5 billion for its 2017 budget. It expects to raise around half of that in foreign loans including from the World Bank and from international debt markets.

“We are not increasing our borrowings. We are simply restructuring. Instead of owing naira, we will be owing dollars,” Adeosun said.

At the briefing, Udoma Udo Udoma, minister for budget and national planing said the government had approved “a slightly different” growth trajectory of 3.5 percent for next year, down from 4.8 percent it announced last week in its strategy paper.

Udoma forecast growth would top 4.5 percent by 2019 and 7 percent by 2020, adding that the government was projecting 2.3 million barrels per day crude production for next year at a price of $45 a barrel.

He said the government was committed to exploring ways of raising additional revenues to lower the debt service burden.

 

Most Popular

Chery Invites Nigerians for Test-Drive in Lagos, says: ‘Come and ignite your Driving passion’

Chery, a leading global automotive brand, has invited Nigerian auto buyers and enthusiasts to a test-drive event slated for May 25, 2024, at the...

FRSC Gets new Corps Marshal, as Biu Retires 7months After Due Date

President Bola Tinubu has appointed ACM Shehu Mohammed as the Corp Marshal and Chief Executive Officer of the Federal Road Safety Commission (FRSC), as...

FG Harps on Local Auto Component Production Revival in Nigeria

The federal government has reiterated its commitment to revitalization of automobile component manufacturing in Nigeria. Director General of NADDC, Mr. Joseph Osanipin reiterated this on...

NADDC to Start Accreditation of CNG Vehicle Conversion Workshop

In a calculated effort to ensure safety and standard, the National Automotive Design and Development Council (NADDC) has concluded arrangements to commence the accreditation...