The Federal Government borrowed $ 300m from Nigerians in the Diaspora before it secured the approval of the National Assembly, the Debt Management Office indicated on Wednesday.
The DMO gave this indication in a response to an enquiry by a non -governmental organisation, Social Action Nigeria .
Social Action Nigeria had in a letter written to the DMO on November 24 , 2017 , demanded to know what uses the Federal Government intended to put the $ 5. 5bn it planned to borrow from external creditors as well as the terms of the loans.
In a response signed by the Director -General , DMO, Ms. Patience Oniha, and dated November 29 , 2017, the agency explained that the $ 300m it had borrowed from Nigerians in the Diaspora was part of the $ 5. 5bn approved for borrowing by the National Assembly.
While the approval was given on November 14 , 2017, the $ 300m was raised in June 2017 through the issuance of the Diaspora Bond.
The DMO said, “On November 14 , the House of Representatives and Senate approved external financing in the manner as follows:
“ $2 .5 bn ; this amount was approved for the part financing of the deficit in the 2017 Appropriation Act . The Act includes a provision for new external borrowing of N1 .068tn , equivalent of about $ 3. 5bn . Out of this amount , only $300m has been borrowed through the issuance of a Diaspora Bond in June 2017 .
“ $3 bn : In this specific instance , this borrowing is for the redemption of maturing domestic debt .
“ Loan sources: The plan is to raise the funds through the issuance of securities in the international capital market in the form of Eurobonds or Diaspora Bonds, or a combination of both . In other words , the lenders to the government would be all the investors who invest in the bonds.
“ Conditions : As you may be aware, the DMO successfully priced a dual-tranche $ 3bn Eurobond on November 20 , 2017 for which a press release was issued. ”
On the conditions for the loans already secured, the DMO said the 10 -year $1 .5 bn Eurobond maturing in 2027 carried an interest rate of 6. 5 per cent, while a 30 -year $ 1. 5bn Eurobond maturing in 2047 carried an interest rate of 7 .625 per cent.
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