FEC approves $2.2bn external borrowing plan to boost economy
By Kunle Sanni
The Federal Executive Council (FEC) has approved an external borrowing plan of $2.2 billion to strengthen Nigeria’s economy and support ongoing reforms.
The announcement was made on Thursday by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, following a council meeting presided over by President Bola Tinubu.
Edun explained that the funding will be raised through a combination of Eurobonds and Sukuk bonds, with $1.7 billion expected from Eurobonds and $500 million from Sukuk.
“The primary objective is to complete the federal government’s external borrowing programme with this $2.2 billion financing package,” Edun stated. “The exact composition of the funding will depend on market conditions and the guidance of transaction advisers when we enter the market.”
He emphasized that the borrowing would occur within the current fiscal year, pending approval from the National Assembly. Edun also highlighted the success of previous domestic dollar bond issuances, which attracted both local and international investors, showcasing the strength of Nigeria’s financial markets.
“The resilience of Nigerian financial markets has been demonstrated, and we are confident in their ability to handle more complex offerings,” he added.
N250 Billion Real Estate Investment Fund Approved
The council also approved the establishment of a N250 billion real estate investment fund to address Nigeria’s significant housing deficit. Edun noted that the fund, managed by the Ministry of Finance Incorporated (MOFI), will focus on revitalizing long-term mortgage financing.
“The MOFI real estate investment fund will initially amount to N250 billion and provide affordable, long-term mortgages to Nigerians seeking to acquire homes. It aims to address part of the 22 million-unit housing deficit,” Edun explained.
This initiative is expected to create jobs, stimulate economic growth, and encourage private sector participation in the housing industry, bringing significant benefits to the broader economy.
“The fund has a long-term vision. Investors will have the opportunity to earn market rates of interest and returns on investment, bolstered by initial seed funding of N150 billion,” he concluded.
