Why we didn’t raise $5.5bn approved by NASS –Adeosun

The Minister of Finance, Mrs Kemi Adeosun, yesterday disclosed why the Federal Government did not raise the full $5.5 billion approved by the National Assembly.

The Minister, who spoke in Abuja said that the National Assembly approved two separate resolutions; one for US$2.5 billion to fund capital expenditure in the 2017 budget and the other to re-finance existing domestic debt of US$3 billion, which was not time bound.

She said: “Our intention for this issuance was to meet our short term requirement to fund US$2.5 billion for the 2017 budget. Following significant investor interest of over US$11 billion, we brought forward a further US$500 million of funding towards the refinancing of existing domestic debt and will assess options for concluding the refinancing process in the New Year.

“Restricting this issuance to US$3 billion also enabled us to optimise the price of the notes, which at 6.5 per cent  (10-year) and 7.625  per cent  (30-year) are significant improvements to our existing portfolio.

Adeosun said capital projects under the 2017 budget include road, rail, power and housing projects which were crucial to the delivery of the economic recovery and growth plan.

“By raising US$1.5 billion of 30-year notes, Nigeria has emulated a number of our international contemporaries, including Brazil, South Africa, Argentina and Egypt to issue long dated debt as the basis for long term infrastructure financing and to establish a benchmark for the private sector to extend the tenure of its own financing.

“This is critical to delivering an environment within which both the government, and the domestic private sector, can rapidly enhance its ability to fund investments in infrastructure projects and broader project finance”, she explained.