By Emma Ujah, Abuja Bureau Chief
The Debt Management Office (DMO) has explained that it could issue Eurobonds to finance the 2019 federal government budget.
According to the agency, media reports that there would be no issuance of Eurobonds this year were incorrect.
The DMO Director-General, Ms Patience Oniha, was reported to have said that the federal government had no plan to issue Eurobonds in 2019. She spoke at the Islamic Finance Conference in Lagos, on Tuesday.
However, in a statement yesterday, the D-G clarified that issuance of Eurobonds to finance the 2019 federal budget had not been foreclosed.
According to her, priority would be given to accessing concessionary funds from multilateral and bilateral sources in the $2.7 billion external borrowing plan in the 2019 budget.
Ms Oniha, added, however, that in the event that the federal government could not raise the entire $2.7 billion, it would turn to commercial sources, including the issuance of securities including Eurobonds for the balance.
The statement read in full, “The Debt Management Office (DMO) wishes to refute reports carried out in various media on June 19, 2019, stating that the Federal Government has no plans to issue Eurobonds as part of its external borrowing in 2019.
“The misrepresentation appears to have arisen during the Islamic Finance News Nigeria forum which held in Lagos on June 18, 2019, where the Director-General responded to a question on whether the Federal Government will issue a U.S. Dollar denominated Sukuk in 2019 which she stated was unlikely given the processes involved in the Sukuk issuance.
“For the records, the 2019 Appropriation Act provides for New External Borrowing of N824.82 billion (the equivalent of USD2.7 billion at USD/N305). Consistent with the Debt Management Strategy of reducing debt service cost, the plan for raising the New External Borrowing is to first access cheaper funding from Multilateral and Bilateral lenders as may be available.
“Thereafter, any balance will be raised from Commercial sources which may include Securities Issuance such as Eurobonds in the International Capital Market.”