The Federal government of Nigeria will be using a new debt management strategy in which it will borrow more from abroad, Finance Minister Kemi Adeosun, has announced.
According to her, FG will borrow more from abroad in foreign currencies than domestically in order to take advantage of lower interest rates and to allow local banks lend to small business owners.
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Henceforth 40 percent of loans would come from abroad, compared with 16 percent as at before, Adeosun said, adding that it will extend government’s debt maturity profile.
Daily Trust says the Nigerian government is planning to borrow as much as $10 billion from debt markets, with about half of it coming from foreign sources, to help fund the 2016 budget.
“As we are moving more of our debt to dollars we need to focus more on exports, especially non-oil exports,” she said, revealing that government approved the foreign borrowing plan “after much debate”.
Junior budget minister Zainab Ahmed added that the debt strategy is aligned with the country’s medium-term plan to move away from short-term loans and to shift government borrowing from the domestic market to cheaper external sources.