The Federal Executive Council (FEC) has approved a $2.2 billion financing plan for external borrowing, which includes the possibility of issuing a Eurobond and a Sukuk bond.
Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, shared this update with the press after the FEC meeting on Wednesday at the Presidential Villa in Abuja.
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“We just had the Federal Executive Council meeting, and I am privileged to present two memoranda to the Federal Executive Council.
“The first one was to complete the borrowing programme of the Federal Government in terms of external borrowing with the approval of a $2.2 billion financing programme.
“It is made up of access to the international capital market for some combination of the Euro bond offer and the Sukuk bond offer, and perhaps a Euro bond of about $1.7 billion.
“Sukuk financing of another $500 million the actual makeup of the financing which will be done as soon as the National Assembly has considered and hopefully approve the borrowing plan.
“If the external borrowing approval is given, it will be done this year, as soon as possible after approval.”
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He explained that the specific combination of instruments to be raised would depend on the advisors’ assessment of market conditions at the time the decision is made to enter the market.
“Of course, earlier in the year, we had shown the resilience of the Nigerian financial markets, and the depth of their capacity, the increased complexity and sophistication by having a domestic issuance of dollar bonds, which attracted Nigerian investors from far and wide.
“Likewise, being able to access the international capital market is also a sign of the acceptance and the support for the macroeconomic programmes of President Bola Tinubu-led administration,” he said.
The minister stated that the economic recovery and revitalization program aimed at transforming the economy is centered on key macroeconomic pillars, including market-driven pricing of petroleum products (PMS) and foreign exchange.
He also revealed that the Federal Executive Council (FEC) had approved the Ministry of Finance’s establishment of an incorporated real estate investment fund.
He explained that this fund will serve as the foundation for revitalizing and reintroducing long-term mortgage financing to Nigeria’s economy.
“The Morph Real Estate Investment Fund is going to be, in the first instance, a N250 billion fund that will provide low-cost and long-term mortgages to Nigerians that want to acquire houses.
“It will help to complete or help to fill part of the gaping 22 million unit housing deficit. Of course, it will create jobs and stimulate economic growth.
“It will also pave the way for other investors in the private sector to come in and participate in the all-important housing construction industry with huge benefits and knock-on effects throughout the whole economy.
“Long-term investors have the opportunity to earn market rates of interest on investment.
“This is going to be blended with seed funding of N150 billion,” he said.
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