ABUJA/LAGOS, March 29 (Naija247news) – Nigeria’s national assembly has approved a $500 million Eurobond sale, the finance minister said on Wednesday, an attempt to plug the yawning budget deficit.
Details of the Eurobond issuance will be released later in a statement, Finance Minister Kemi Adeosun told reporters in Abuja. She did not provide any more information.
The government, which plans to increase public spending by almost 20 percent this year with a deficit of 2.36 trillion naira ($7.7 billion), sought the go-ahead for a new issue after raising an oversubscribed $1 billion Eurobond last month.
The increase in public spending follows the Nigerian economy’s first annual contraction in 25 years in 2016. The slump in global oil prices has reduced government revenues and battered the naira.
Shortly after the books opened on the February bond, Nigeria had received bids of over $1 billion for the paper due 2032, IFR reported.
Priced at 7.875 percent, it was almost eight times oversubscribed.
The government has laid out plans for 2017 to spend a record 7.3 trillion naira ($24 billion) to help pull Nigeria out of recession. It planned to spend 6.1 trillion naira last year, but struggled to fund it.
The country has registered a $300 million Diaspora bond programme — for Nigerians abroad — with the U.S. Securities and Exchange Commission and is seeking at least a $1 billion loan from the World Bank, as well as a $1.3 billion loan from China to fund railway projects.
Nigeria 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. ($1 = 306.6500 naira)