Nigeria Turns to Local Debt as Virus Shuts Eurobond Markets

LAGOS (Capital Markets in Africa) — The Nigerian Senate approved President Muhammadu Buhari’s request to raise 850 billion naira ($2.2 billion) in domestic markets, scrapping plans to sell Eurobonds this year.

Lawmakers in the committees for finance and appropriation will work with the finance minister on the details of the borrowing plan, Senate President Ahmed Lawan said during Tuesday’s plenary session

“Conditions in the international capital market may not be favorable for the issuance of Eurobonds,” Patience Oniha, director-general of the Debt Management Office said by email.

Approving the request will ensure that there are adequate funds to finance capital projects and programmes in the 2020 budget, Buhari said in the letter to lawmakers.

The loan was originally approved to be raised as foreign debt in the 2020 spending plan, which is now under review due to the crash in crude prices that make up more than half of government earnings in Africa’s most populous country.

With the approval, Nigeria’s planned domestic borrowing for this year comes to 1.6 trillion naira, according to the DMO.

Source: Bloomberg Business News