$2.5 Billion Eurobond Won’t Raise Nigeria’s Total Debt – DMO
Whatever your concerns about
Nigeria’s foreign borrowing may be, you should shelve it.
This is because the Debt Management Office has assured that the $2.5 billion Eurobond will not increase the nation’s total debt commitment.
The DMO, which gave the assurance in a statement on Thursday, said the debt would rather save the country 64 billion naira per annum because the money would be used to liquidate some expensive local debts.
According to the agency, the foreign borrowing will not increase the country’s total indebtedness because the proceeds will be used to repay maturing local debts instead of rolling them over on maturity.
“The planned external financing of $2.5 billion is for the refinancing of maturing domestic debt obligations of the Federal Government. It is not a new or incremental debt, because it will not lead to an increase in the public debt stock.
“The purpose is to rebalance the Federal Government’s debt portfolio by increasing the external component, while reducing the domestic component in line with Nigeria’s Debt Management Strategy, which has a target of 40:60 ratio for external to domestic debt from the current position of about 25:75, respectively,” DMO said.
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