From Ndubuisi Orji, Abuja

President Bola Tinubu has sought the approval of Senate for implementation of 2.2 billon dollars new external borrowing plan.

Tinubu’s request is contained in a letter addressed to President of Senate, Godswill Akpabio and read at plenary, yesterday.

  In the letter  titled, “Request for the resolution of the National Assembly for the implementation of external borrowing of about $2.2 billion in the 2024 Appropriation Act”,  Tinubu said the request is in accordance with the provisions of Sections 21(1) and 27(1) of the Debt Management Office (DMO) (Establishment, ) Act, 2003, and the approval of the Federal Executive Council..

“I write to request for a resolution of the National Assembly to raise the sum of N1.7 trillion, equivalent of 2.2 billon dollars at the budget exchange rate of one dollar to N800 provided as new external borrowing in the 2024 appropriation act to part finance the budget deficit of N9.179 trillion.”

The President said the funds were needed to give more impetus to the ongoing implementation of the projects and programmes in the 2024 appropriation act, which were designed to stabilise the economy.

He said the key projects to which the proceeds would be deployed formed the priority sectors of the economy, such as power, transport, agriculture, defence and security.

” It is also important to add that the proceeds will increase the accrual to the external reserves as the proceeds will be received into the Central Bank of Nigeria’s (CBN) account, and thereby support the naira exchange rate”.

He said the plan was to raise the new external borrowing from a combination of commercial sources, such as issuance of Eurobonds,

Sovereign Sukuk,International Capital Market (ICM), among other sources.

Tinubu said Nigeria could raise all or part of the new external borrowing fund through the issuance of eurobonds in the ICM.

“Nigeria has been a regular issuer in the ICM and had raised 16.92 billion dollars out of which 15.12 billion dollars is outstanding.

” The ICM is now open to countries similar to Nigeria, and so far, Cote d’Ivoire, Benin, Kenya, and Cameroon have issued Eurobonds in the ICM in 2024.

“A debut Sovereign Sukuk of up to 500 million dollars in the ICM with credit enhancement from the Islamic Corporation are for Insurance of Investment and Export Credit (ICIEC), subject to the terms and conditions,” hr said.

The President said lead managers such as Citigroup Global Markets Ltd, Goldman Sachs, JP Morgan and Standard Chartered have been appointed through an open competitive bid to advise on the issuance of eurobonds, where it becomes necessary.

   In a related developent, President Tinubu transmitted the 2025–2027 Medium-Term Expenditure Framework/Fiscal Strategy Paper (FSP) to the Senate and House of Representatives for consideration and approval.

In the letters to the two legislative chambers read by the Senate President, Godswill Akpabio and the Speaker of the House, Tajudeen Abbas, at plenary, Tinubu sought the quick approval by the lawmakers for the MTEF/FSP to guide the preparation of the 2025  Appropriation Bill. 

He explained that the 2025- 2027 MTEF&FSP was approved on November 10, at a meeting of the Federal Executive Council (FEC).

The FEC had last week approved a N47.9 trillion budget estimate for the 2025 fiscal year. According to the Minister of Budget and Economic Planning, Atiku Bagudu, the FEC pegged the price of crude oil at $75 per barrel, and oil production at 2.06 million barrels per day, with the exchange rate at N1,400 to the dollar.

President Tinubu noted that since “the 2025 budget of the Federal Government will be prepared based on the parameters and fiscal assumptions of the approved 2025-2027 (MTEF&FSP), it is imperative to seek the National Assembly’s expeditious legislative action on this submission.” After reading the letters, Akpabio and Abbas referred them to the relevant Senate and House Committees for further legislative actions.