Nigeria's upper house approved the issuance of a new $500 million Eurobond on Wednesday, the chamber's deputy president said, to help fund the budget deficit at a time Africa's biggest economy faces a shortage of hard currency.
| Senate president, Saraki |
The increase in public spending comes after the Nigerian economy posted its first annual contraction in 25 years in 2016 as a slump in global oil prices reduced government revenues and battered the naira currency.
"The Senate considered the request of Mr. President for the approval of $500 million Eurobond from the international capital market. The request is hereby approved," Ike Ekweremadu, deputy Senate president, said in a televised debate.
Nigeria struggled to finance its planned spending of 6.1 trillion naira ($19.66 billion) in 2016. In the 2017 budget presented to parliament, public spending is forecast at 7.3 trillion naira.
Nigeria in February raised $1 billion in an oversubscribed sale of 15-year Eurobonds at 7.875 percent.
The finance ministry forecasts a 2.36 trillion naira budget deficit in 2017, which it plans to fund through a mixture of foreign and domestic borrowing.
The country has registered a $300 million Diaspora bond programme with the U.S. Securities and Exchange Commission and is seeking at least a $1 billion loan from the World Bank and a $1.3 billion loan from China to fund railway projects.
The government also plans a 20 billion naira "green bond" next month after a new savings bond this month targeted at retail investors to broaden its funding base.
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