The Federal Government is set to borrow $1bn from the international capital market to fund its expansionary budget and stimulate economic growth as inflation, slow growth and other challenges continue to hit the economy.
Consequently, the Debt Management Office is seeking two lead managers and a financial adviser to organize the issuance of $1bn Eurobonds this year.
The sale is the first tranche of the Federal Government’s $4.5bn Global Medium-Term Notes Issuance Programme that will run through 2018, according to a statement published by the DMO in the United Kingdom’s Financial Times newspaper on Monday.
Bloomberg reports that the Federal Government wants to appoint two international banks as joint lead managers and a local lender as financial adviser for the whole programme, according to the statement.
Bids are to be submitted by noon on September 19 in Abuja.
The move will “enable Nigeria to have the flexibility of quickly taking advantage of favourable market conditions in the international capital market to raise funds if and only when the need arises,” according to the statement.
The Eurobond sales this year would be the first since the Federal Government tapped the market in July 2013 and an inaugural issue in 2011.
President Muhammadu Buhari has approved a record N6.1tn ($19.3bn) spending plan this year and the Treasury intends to borrow to plug the budget’s N2.2tn deficit.
The Federal Government is increasing spending to stimulate the economy after it contracted by 0.4 per cent in the first quarter as revenue dwindled amid lower oil prices and a decline in output.