The Federal Executive Council, FEC, presided over by Acting President, Yemi Osinbajo, has approved plans to issue $3 billion worth of bonds to refinance maturing government treasury bills.
The plan, which will soon go to the National Assembly for approval is meant to cut cost and extend debts maturity as well as relieve pressure on the country’s debt service.
This was even as Council approved 2018-2020 Medium Term Expenditure Framework, MTEF, Fiscal Strategy Paper.
The Minister of Finance, Kemi Adeosun, told State House Correspondents at the end of FEC meeting, which lasted about five hours yesterday, that this is not a new borrowing plan nor a plan to dollarise the economy but simply to exchange matured naira treasury bills for dollars, adding that the rate of borrowing currently at between 13 and 18.5 per cent will be halved to 7 per cent which is the average international borrowing rate.
The Finance Minister explained that the new development on Nigeria’s borrowing will also relieve the crowding out effect on the private sector and free up more cash for banks to lend to the private sector, adding that it will have a multiplier effect on job creation in the country.
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