President Bola Tinubu has sought the approval of the Senate to raise two billion dollars in the domestic debt market through a foreign currency-denominated issuance programme.
Tinubu’s request is contained in a letter addressed to the Senate President, Godswill Akpabio, and read at plenary on Tuesday.
The president, in the letter, said that the request was in line with Section 44 (1)(2) of the Fiscal Responsibility Act, 2007 and Presidential Executive Order No. 16 of 2023.
He said that the request was to enhance the implementation of a local issuance programme for foreign currency-denominated financial instruments.
“I write to request the kind approval of the National Assembly for capital raising of up to two billion dollars in the domestic debt markets towards implementation of the presidential executive order on foreign currency-denominated financial instruments,” the letter read.
According to the president, the funds raised will be invested in critical sectors of the economy.
He said the sectors 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.
Tinubu 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.
“This is a viable fiscal strategy with the potential to boost Nigeria’s external reserves and promote exchange rate stability.
“It will 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 said.
The president said that while the proposed capital raising would increase the public debt stock and debt servicing costs, 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 senate president, thereafter, referred the request to the Senate Committee on Local and Foreign Debts for further legislative inputs and to revert to plenary in two weeks.
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