Subject to approval from the legislation, the Federal Government will borrow another $10 billion from debt markets, with about half of that coming from foreign sources. This includes a $1 billion Eurobond that it intends to float later this year.
This comes hot on the heels on the confirmation that the recession of the Nigerian economy is not more ‘technical’ but now a reality. Along with the chronic shortage of foreign exchange, which has done nothing but plunge the Naira to successive all-time lows, businesses have been shutting down, with the MAN claiming that 272 businesses have closed shop in the past 1 year.
The Minister of Finance, Mrs. Kemi Adeosun, blamed the plunge in oil prices as well as militancy for accelerating the recession Nigeria finds itself in. To get out of it, she said Nigeria has to correct the structural problems that led to the recession.
“If we rely on oil and the price of oil remains low and the quantity of oil remains low, we can’t grow. We have to grow our non-oil economy,” Reuters quotes Adeosun as saying.
In an effort to achieve this, the FG, in a medium-term borrowing plan spanning 2016-2019, is attempting to adjust its debt mix so that 40 percent of loans would be sourced externally, up from the 16 percent now, as well as extend its debt maturity profile.
Parts of this article originally appeared in Reuters.