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Nigeria to raise N867.5bn to fund deficit

By  Amaka Agwuegbo

The Director General of the Debt Management Office has said that Nigeria plans to sell N867.5bn ($5.74bn) worth of bonds, about a fifth of planned expenditure this year, to fund the budget deficit.

“That is the minimum we’ll raise from the Nigerian bond market” in 2010, Nwankwo told reporters today in Lagos, the commercial capital.

According to figures presented by Nwankwo, budget proposals now being considered by lawmakers envisage spending of N4.1trn this year, while the planned sale of bonds is 66 per cent higher than the N524.1bn sold last year.
Nigeria, which depends on oil and gas exports for more than 80 per cent of government revenue, has been striving to cover gaps in income caused by conflict in its southern oil region and a decline in crude prices since 2008.

Armed attacks targeting the oil industry cut more than 25 per cent of Nigeria’s crude exports between 2006 and 2009.

Nwankwo said Nigeria also plans to reintroduce a $500m international bond it suspended last year because of the global financial crisis, should it be approved by parliament,

Nigeria’s total public debt stock currently stands at N3.8trn ($25.7bn), according to the Debt Management Office. Out of this figure, 85 per cent is domestic debt of N3.2trn, while 15 per cent is external debt.

The ratio of Nigeria’s public debt to its gross domestic product of N20trn is 13.8 per cent, compared to more than 50 per cent before the country exited its Paris Club debts in 2005, Nwankwo said.

Funds raised from bonds have been used to build roads, fund agriculture and buy new train engines to revive the country’s railways, he said.


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