Nigeria To Borrow $4.3 billion To Fund 2020 Spending Plans

Nigeria has revealed plans to borrow 1.549 trillion naira ($4.3 billion) from domestic and international markets to fund its 2020 budget, according to the country’s Debt Management Office.

Director General, Patience Oniha said a little more than half 805 billion naira, will be external financing while 744 billion naira will be borrowed from the domestic market.

Some 150 billion naira of the required funds will be sourced through the sale of sukuk bonds, she said.

Nigerian President Muhammadu Buhari approved a record 10.59 trillion naira ($34.6 billion) budget for 2020 in December, marking the leader’s first spending plan not beset by major delays.

The president’s signature paves the way for a likely return to the international debt market next year as Nigeria still struggles to shake off the impact of a 2016 recession it emerged from the following year.

The administration will send parliament a borrowing plan for 2020-2022 to help finance the deficit budget, Buhari said, without giving further details.

The budget, passed by lawmakers earlier this month, assumes a deficit of 1.52% of the estimated gross domestic product – representing around 2.18 trillion naira – to be financed through foreign and domestic borrowing.

Crude production is assumed at 2.18 million barrels a day with an oil price of $57 per barrel, according to the spending plan. Nigeria is Africa’s top oil producer.

Buhari acknowledged the delays that plagued his first term’s budgets, as well as those of other administrations in the 20 years since Nigeria returned to democratic rule.

“This will be just the fourth time that the federal budget was passed before the end of the previous year, and this is the earliest,” he said.