The Federal Executive Council (FEC) has approved a fresh borrowing plan of $2.2b, made up of $1.7b and SUKUK financing of $500 million to strengthen the country’s finances and boost economic reforms.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, disclosed this after the FEC meeting presided over by President Bola Tinubu at the State House, on Thursday.
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Edun said if approved by the National Assembly, the borrowing plan would grant Nigeria access to the international capital market for a combination of the Euro bond and SUKUK financing.
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The Minister said, “The first one was to complete the borrowing program of the federal government in terms of the external borrowing with the approval of the $2.2 billion financing program made up of access to the international capital market for some combination of the Euro bond offer and the Sukuk bond offer.
“A Euro bond of about $1.7 billion and Sukuk financing of another $500 million, the actual makeup of the financing which will be done as soon as the National Assembly has considered”, he said.
According to the minister, Nigeria had showcased the resilience of its financial markets, capacity and increased complexity through domestic issuance of dollar bonds, stressing that for Nigeria being able to access the international capital market is an indication of the nation’s acceptance and support for President Tinubu’s macro-economic programmes.
His words, “Being able to access the international capital market is also a sign of the acceptance and the support for the macroeconomic program of Mr President and indeed his entire administration, as we know that economic program, that economic recovery and revival program to turn around the economy, is focused on macroeconomic the macroeconomic pillars of market pricing of the PMs and market pricing of foreign exchange.”
He added that the approval was part of the Nigerian 2024 Appropriation Act has amended.
Edun also disclosed FEC also approved a N250 billion real estate investment fund aimed at providing affordable, long-term mortgages to Nigerians.
He said the Fund was designed to address the country’s critical 22 million-unit housing gap while creating jobs and boosting private sector investment in the housing sector.
The new initiative, known as the Ministry of Finance Incorporated (MOFI) Real Estate Investment Fund, would offer low-cost mortgages to individuals seeking to own homes, with interest rates targeted at single-digit or low double-digit figures.
Edun explained that the fund’s unique structure will make it possible for Nigerians to access mortgages with interest rates ranging between 11% to 12%, a significant reduction from the current market rates that often exceed 30%.
The loans will have longer repayment tenures, potentially spanning 20 years or more, to make homeownership more accessible.”
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