The Nigerian government will borrow US$4.34bn from the domestic market to part-finance the budget deficit
This comprises of the earlier approved US$2.17bn domestic borrowing and US$2.32bn external borrowing.
A statement from the Debt Management Office (DMO) said that with the COVID-19 pandemic and its attendant effect on the world economy and the international capital market, the Federal government reappraised its borrowing plans and decided that it would be more expedient to raise the US$2.32bn, earlier approved as external borrowing, from domestic sources. This conversion from external to domestic is to ensure that the implementation of the 2020 Appropriation Act is not jeopardised by lack of funds.
With this change, the total new domestic borrowing under the 2020 appropriation becomes US$4.34bn which is the same as the total new borrowing in the 2020 Appropriation Act.
For compliance with the law, President Muhammadu Buhari forwarded requests to the Senate and House of Representatives to convert the source for raising the US$2.32bn from external to domestic. The Senate approved the request on 28 April 2020, while the approval of the House of Representatives is expected.
Upon approval of the request by the House of Representatives, the DMO will issue FGN Securities in the domestic market to raise the US$2.32bn, thereby providing high-quality investment opportunities for the investing public.
