The Federal Executive Council (FEC) has approved a new borrowing plan of $2.2 billion, comprising $1.7 billion in Euro bond financing and $500 million in SUKUK financing, aimed at strengthening the country’s finances and driving economic reforms.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, revealed this following the FEC meeting, which was chaired by President Bola Tinubu at the State House on Thursday.
Edun explained that, subject to approval by the National Assembly, the borrowing plan would enable Nigeria to access the international capital market, combining Euro bond and SUKUK financing options.
“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,” Edun said.
He continued, “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.”
According to Edun, Nigeria’s successful issuance of domestic dollar bonds demonstrates the resilience of its financial markets, capacity, and growing complexity. Access to the international capital market further signals the nation’s endorsement of President Tinubu’s macroeconomic policies.
“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 pillars of market pricing of the PMs and market pricing of foreign exchange,” he added.
He also stated that the approval was part of the amended Nigerian 2024 Appropriation Act.
In a related development, Edun announced that FEC had approved a N250 billion real estate investment fund designed to provide affordable, long-term mortgages for Nigerians.
The fund aims to address the country’s critical 22 million-unit housing deficit while creating jobs and stimulating private sector investment in the housing sector.
The Ministry of Finance Incorporated (MOFI) Real Estate Investment Fund will offer low-cost mortgages, targeting interest rates in the single-digit or low double-digit range, significantly lower than 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,” Edun said.
