President Bola Tinubu has requested the Senate’s approval to raise $2 billion in the domestic debt market through a foreign currency-denominated issuance programme.
The request is contained in a letter addressed to the Senate President, Godswill Akpabio, and was read at plenary on Tuesday.
According to President Tinubu, the request is to enhance the implementation of a local issuance program for foreign currency-denominated financial instruments.
He said that the funds raised would be invested in critical sectors of the economy, which would be identified based on their potential to accelerate economic growth, drive infrastructure development, enhance foreign exchange earnings, create employment, and provide returns on investment.
The president also said that recommendations for sectoral investment would be made by the Minister of Finance and Coordinating Minister of the Economy, subject to approval and appropriation by the National Assembly.
He added that this was a viable fiscal strategy with the potential to boost Nigeria’s external reserves and promote exchange rate stability.
Tinubu highlighted the benefits of the programme, saying it would diversify the Federal Government’s sources of funding, deepen the investor base for FGN securities, and expand the range of products in the domestic financial market.
He also noted that the programme would provide opportunities for investors to earn returns on their U.S. dollar holdings while supporting productive investments in the country’s economy.
The president acknowledged that the proposed capital raising would increase the public debt stock and debt servicing costs.
He however, emphasised the potential benefits of the programme, including boosting Nigeria’s external reserves and promoting exchange rate stability.
The Senate President therefore referred the request to the Senate Committee on Local and Foreign Debts for further legislative inputs and to revert to plenary in two weeks.
