The Purpose Of The $5.5bn Nigeria Is Seeking To Borrow - Federal Ministry Of Finance
The federal ministry of finance in a series of tweets on Friday stated how the $5.5bn Nigeria is seeking to borrow will be used;
The $5.5bn Nigeria is seeking to borrow is made up of $2.5bn to finance the 2017 budget deficit and $3bn to refinance LEGACY domestic debt.
The $3bn component will not result in an increase in the public debt. It is purely a portfolio restructuring activity.
Nigeria's new Debt Management Strategy has main goal, the re-balancing of public debt portfolio in favour of long-term external debt.
What this means is we're going to be replacing domestic debt—which is mostly short-term—with cheaper & longer-term external debt
The $3bn of the $5.5bn is solely for the purpose of this refinancing/re-balancing of our debt portfolio. It's not 'new' borrowing.
The $2.5bn component is to part-finance the 2017 budget deficit, and has already been provided for in the 2017 Appropriation Act.
We're confident that our Debt Management Strategy, as outlined above, will mitigate Nigeria's debt service risk & help fast-track development.
Our Debt Management Strategy will achieve the following:
-Reduce Debt Service Cost
-Create space for private sector borrowing
-Boost FX Reserves.
We're also boosting contribution of domestic revenues to Nigeria's Revenue Sources Mix. So that Nigeria is not reliant only on Oil or Debt.
How are we boosting domestic revenues? By plugging leakages using Tech, and by raising tax collection through initiatives like
Comments
Post a Comment