Nigeria’s debt rises to N38 trillion as Buhari regime borrows additional N250 billion

The DMO also mentioned that the proceeds would be used solely to construct and rehabilitate key road projects across the country’s six geopolitical zones.

A photo of President Muhammadu Buhari superimposed on N1000 note used to illustrate this story
A photo of President Muhammadu Buhari superimposed on N1000 notes used to illustrate this story
President Muhammadu Buhari’s regime says it is seeking to borrow an additional N250 billion through the Sukuk bond as Nigeria’s debt burden rises to N38 trillion.

Specifically, the Debt Management Office (DMO) announced in a statement on its website the regime had offered for subscription N250 billion road Sukuk instrument for N1,000 per unit, indicating that the instrument was issued by “FGN Roads Sukuk Companies 1 Plc.”

The offer is N1,000 per unit subject to a minimum subscription of N10,000 and multiples of N1,000 thereafter.

“It qualifies as securities in which trustees can invest under the Trustee Investment Act. It also qualifies as Government securities within the meaning of Company Income Tax Act (CITA) and Personal Income Tax Act (PITA) for Tax Exemption for Pension Funds, among other investors,” the DMO explained.

The Sukuk instrument will be listed on the Nigerian Exchange Limited and FMDQ Securities Exchange Limited.

“Classified as Liquid Asset by the Central Bank of Nigeria, and certified by the Financial Regulatory Advisory Council of Experts (FRACE) of the Central Bank of Nigeria,” it stated. “It is backed by the full faith and credit of the Federal Government of Nigeria.”

The DMO also mentioned that the proceeds would be used solely to construct and rehabilitate key road projects across the country’s six geopolitical zones.

It announced the due date as December 2031 at a rental rate of 12.80 per cent per annum.

Meanwhile, the DMO has announced that Nigeria’s total public debt as of September 30 is N38 trillion ($92.62 billion).

The office stated that the data included the total external and domestic debts of the federal government, state governments, and the Federal Capital Territory.

It explained that the increase of N2.54 trillion compared to the corresponding figure of N35.4 trillion at the end of the second quarter of 2021 was accounted for by the $4 billion Eurobonds issued by the government in September.

“The issuance of the $4 billion Eurobonds has brought significant benefits to the economy by increasing the level of Nigeria’s external reserves, thereby supporting the naira exchange rate and providing (the) necessary capital to enable the federal government finance various projects in the budget,” said the DMO. “The triple tranche 4 billion dollars Eurobond, issued in September 2021, was for the implementation of the New External Borrowing of 6.18 billion dollars in the 2021 Appropriation Act.”