The Federal Executive Council (FEC) yesterday approved the issuance of $2.9bn Eurobond to implement the external borrowing plan captured in this year’s budget for the funding of capital projects.
The approval was granted at the FEC meeting presided over by President Muhammadu Buhari at the Council Chambers of the State House Villa, Abuja yesterday.
This is just as the Senate approved the Federal Government foreign loan of £2.786bn as contained in the 2018 appropriation.
The Red Chamber also approved another $82.54 million to refinance the balance of $500m matured Eurobond in the international capital market.
Minister of Finance, Zainab Ahmed told State House Correspondents at the end of the meeting that the loan has been captured in this year’s appropriation Act.
“The focus of this approval is to enable us implement the borrowing external plan of N849.67 billion equivalent of $2.786 billion which is provided for in the 2018 Appropriation Act and this is to fund capital projects in 2018 Budget,” she said.
She also said approval was granted to raise the sum of $82.5m to bridge the shortfall of the 500million Eurobond that matured on the July 12, 2018.
“In addition to this approval for the issuance of Eurobond, we also got the approval for payment to transaction parties and their respective fees like settling bills and expenses.
“We have as parties for the transactions, two joint league managers, a combination of Citibank group as well as Standard Chartered Bank as joint league managers and FSB Merchant Bank as financial advisers; the White and Case LIP as legal managers and Ighodalo as legal advisers for Nigeria. The total cost for this advisory group is N374.6m,” she said.
The minister said so far N460bn has been released for this year’s capital projects, adding that the council also approved $60m for a programme in the Niger Delta area of the country tagged “Life and D”.
“It is in the sum of $60m that will be a combination of loans and grants. The projects will be implemented in the Niger Delta States of Abia, Akwa Ibom, Bayelsa, Cross River, Delta, Edo, Imo, Ondo and Rivers.
“However, when we reviewed the project in the nine states, we found that six of the states met their own requirements while three did not. So, the three will be assisted to enable them improve and join the team,” she said.
In a separate development, the Senate, while adopting the report of the Committee on Local and Foreign Debts, chaired by Sen Shehu Sani (APC, Kaduna), advised the Federal Government to reduce or limit its external borrowing and ensure full utilization of the loans to be obtained.
While thanking the committee for “expeditiously considering the loan request,” Deputy Senate President Ike Ekweremadu (PDP, Enugu) said the Federal Government should utilise it appropriately.
Also, Senate Leader Ahmad Lawan (APC, Yobe) urged the Executive arm to quickly go for the Eurobond fund “and come and implement the 2018 component of the capital projects.”