The Federal Executive Council (FEC) presided over by President Muhammadu Buhari has approved six transaction parties to advise the federal government on the issuance of $2.78 billion Eurobonds and other securities at the international capital market.
The transaction parties are Citigroup Global Market Limited and Standard Chartered Bank as joint manager; FSDH Merchant Bank Limited as financial adviser; White And Case LLP, Banwo and Ighodalo as legal adviser and Africa Practice Limited as technical adviser on communication.
Zainab Ahmed, the minister of finance, while briefing journalists in Abuja, said the transaction parties are expected to advise the government on “the structure and timing, as well as, documentation for the issuance” of the Eurobonds and other securities.
She said the approval is part of government’s commitment of the implementation of the 2018 Appropriation Act adding that “Consistent with government’s policy on development of infrastructure, the proceeds of the euro bond issuance will be deployed to fund critical capital projects in the 2018 Appropriation Act”.
An estimated N849.673 billion ($42.78 billion) is expected to be externally borrowed to finance part of the deficit in the 2018 appropriation Act.
While there are worries over Nigeria’s rising debt profile, which is estimated to have grown by 145 percent in the past three years, the government says there is room for more debt for Nigeria.
Explaining the nation’s debt-to-GDP ratio, Udo Udoma, minister for budget and national planning said Nigeria has a sustainable debt profile.
“Nigeria has a sustainable debt profile with ample room to borrow more whenever we may require doing so. Nigeria runs no debt risk and the Debt Management Office carries out an annual Debt Sustainability Analysis to ensure that we stay that way,” he had said.