Nigeria To Borrow $2.7 Bln From External Sources In 2019

Nigeria will raise $2.7 billion from external sources finance part of the 2019 budget deficit, the Debt Mangement Office (DMO) has said.

In a statement on Thursday, the debt office said contrary to reports in the media the country intend to sources for money to bridge the 2019 budget gap this year from both local and external sources.
According to the DMO, the 2019 budget provides for nex external borrowing of around 824.82 billion naira.
"Consistent with the Debt Management Strategy of reducing debt service cost, the plan for raising the New External Borrowing is to first access cheaper funding from Multilateral and Bilateral lenders as may be available.
"Thereafter, any balance will be raised from Commercial sources which may include Securities Issuance such as Eurobonds in the International Capital Market," the debt office said.
The agency responsible for managing the country's debt portfolio noted that it will continue to focus on its objective of reducing debt service costs by emphasizing borrowing from concessional sources while considering Eurobonds and other commercial sources as secondary options.
Reports on in the media on Tuesday quoted the Director General of the DMO as saying Nigeria has no intention to raise funds from the International Capital Market (ICM) this year. But patience Oniha in a statement by the debt office said he was basically referring to dollar Sukku raising and not Eurobond
Nigeria approved a three-year plan in 2016 to borrow more from abroad. It wants 40 percent of its loans to come from offshore sources to lower borrowing costs and help to fund record-high budgets.
In this year’s budget, Nigeria had proposed to borrow 802 billion naira from external source out of the 1.86 billion naira budget deficit proposal.
The West African country borrowed $3 billion via Eurobonds in 2017, part of which it used to fund its budget that year. It then followed with a $2.5 billion Eurobond sale last year to refinance local currency bonds at a lower cost. Many Nigerians are not happy with the government borrowing policy as the cost of debt servicing has deprived the country of huge resources to fund projects of economic benefits.
Nigeria currently spends 60 percent of its revenue to service its outstanding debt, leaving the country barely with around 40 percent to finance recurrent and capital expenditure.