The Federal Executive Council (FEC) presided over by Acting President, Yemi Osinbajo, has approved plans to issue $3 billion (about N900 billion) worth of bonds to refinance maturing government treasury bills.
The plan, which will soon go to the National Assembly for approval is meant to cut cost and extend debts maturity as well as relieve pressure on the country’s debt service.
This was even as Council approved 2018-2020 Medium Term Expenditure Framework (MTEF) Fiscal Strategy Paper.
The Minister of Finance, Kemi Adeosun, told State House Correspondents at the end of FEC meeting yesterday, that this is not a new borrowing plan nor a plan to dollarise the economy but simply to exchange matured naira treasury bills for dollars, adding that the rate of borrowing currently at between 13 and 18.5 per cent will be halved to 7 per cent which is the average international borrowing rate.
“What we are simply doing is that as Nigerian government treasury bills mature, instead of rolling them over, which is what we have been doing, we are going to pay them off by the proceeds of dollar denominated bonds which we will be issuing and those bonds with three years maturity whereas the treasury bills are 91 to 364 days on average. So we’re taking short money and refinancing it long.” (The Sun)
