Nigeria’s upper house approved on Wednesday a request by the government to sell a $500 million Eurobond to help fund the 2017 budget, its deputy president said.
“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.
The approval was after two hours closed door session.
Moving the motion, Deputy Senate Leader, Bala Ibn N’allah explained that time was against the 2016 budget, adding that it would be disastrous for nation for any delay.
He urged the Senate to set aside processes that will make it possible for prompt approval.
In response, Minority Leader, Godswill Akpabio while seconding the motion, said: “despite the lack of consultation, I wish to second the motion to enable the Committee of the whole consider the request”,
Deputy Senate President, Ike Ekweremadu who presided over the Committee put a vote and it was immediately approved.
Meanwhile, the approval would enable President Muhammadu Buhari to source the amount from the Capital Market.
Naija247news recalled that on February 22, Vice-President Yemi Osinbajo, then acting president, wrote to the national assembly requesting the loan to fund the 2016 budget deficit.
“The external borrowings incurred to date consist of USD 600 million from the African Development Bank and USD 1 billion Eurobond from the International Capital Market (ICM) only,” the letter read.
“Thus, based on the 2016 appropriation and applying the average exchange rate, there is headroom to access further international funds.
“Following the high over subscription of the recent USD 1 billion Eurobond issuance, we wish to take advantage of favourable market conditions to issuance of Eurobond debt instrument of USD 500 million to fund the implementation of the 2016 budget, which is still ongoing.”
Osinbajo explained that the $500 million would be used as “funding sources” to finance the deficit, including capital expenditure projects as specified in the 2016 budget.
He added that the Debt Management Office (DMO) and and the government’s appointed transaction parties were working to ensure the best terms and conditions for the country as regards the loan.