Apparently bowing to various pressures, Nigerian government has resolved to shun foreign loans in preference to sourcing about N2.23 trillion through internal sources for funding the 2016 budget.
In the past three months, the government through its regulatory agencies has been paying more attention to sourcing money with which to fund its deficit 2016 budget from local sources as the IMF and other international financial institutions said they were not satisfied with what they described as “slow pace of economic reforms in Nigeria in the past one year.”
Sources at the Debt Management Office said government had concluded plans to perfect immediate borrowing of N120bn ($387m) in local-currency denominated bonds on September 14.
This is in addition to the Central Bank of Nigeria information, on Wednesday, that the banking and other financial institutions should prepare to raise the sum of N952.04bn ($3.02bn) through issuance of new Treasury Bills (TBs) as from September to December 1, 2016.
While the DMO’s bid is expected to be in split-bond units of N40bn, N45bn N35bn, and with maturity expected to run through 2021, 2026 and 2036, the funds through CBN will be maturing in periods of one year until they are offloaded in 2038, said the official.
In its latest TBs issuance calendar, the CBN said it would sell N264.47bn worth of three-month bills, N204.88bn of six-month bills and N482.69bn of one-year bills, Reuters reported on Wednesday.
The expected loans borrowing from the local market is urgently needed to kick start some capital projects, including roads, railways and defence, which is part of the estimated at N2.3tn deficit in the 2016 budget.
In its fourth quarter TBs issuance programme released on Tuesday, the CBN said it would immediately raise about N815.37bn, comprising 91 days, 182 days and 364 days debt instruments.
The Federal Government said it is still suffering scarcity of funds, even as its foreign reserves dip further from $26 billion in July to $24 billion in August due to short revenues from crude exports.
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